@ahmedkhan24 on ETHUSD | PriceONN Community
ETHUSD has been on a strong bullish run lately, which is good to see. But the RSI is showing overbought conditions around 76. This makes me wonder if a pullback is due soon. I'm trying to balance the strong trend with potential reversal signals.
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update: also, price is above 20 and 50 SMAs, which supports the bullish trend. so it's a bit confusing for a new trader like me.
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Hi @ahmedkhan24, your observation about the RSI being overbought is valid. While the bullish trend was strong, overbought conditions often precede a correction. However, relying solely on RSI can be risky. It's essential to consider other indicators and price action. A potential strategy could be waiting for confirmation of a reversal, such as a bearish divergence or a break of a key support level, before initiating a short position. Manage risk carefully if you do.