Ethereum Price Rally Hits Overbought Territory Amid Resistance at $2,550

Ethereum's price rally has been gaining momentum, but it may be overheating. The daily relative strength index (RSI) reached 79.12 on August 25, which is well above the conventional overbought threshold of 70. This suggests that buyers may need fresh demand to carry ETH through the resistance concentrated above $2,500.

The price rally has been driven by a combination of factors, including the US Treasury's decision to increase the maximum size of its longer-dated bond buybacks and the Securities and Exchange Commission's proposed exemptions for certain investment contracts involving crypto assets. The rally also coincided with an unusually large derivatives reset, which led to short sellers losing nearly $2.7 billion within 24 hours.

Despite the overbought conditions, Ethereum's price remains roughly 29% above its August 19 opening price of $1,916. However, a move through $2,550 could force additional short positions to close and help ETH target $2,600. Above that range, the daily chart shows limited recent price structure until around $2,700, followed by the psychological $3,000 level.

Michaël van de Poppe said ETH was approaching a higher-time-frame support level against Bitcoin and could benefit once Bitcoin begins consolidating. However, the dollar chart must still clear $2,550 to confirm continuation.