Ethereum Bottom Is In: RSI & Funding Signal Rebound

• Ethereum’s RSI hits lowest level since April $1,350 bottom
• Negative funding suggests bearish overcrowding
• Traders expect a sharp upside move from here

Ethereum ($ETH) may have just found its bottom, according to fresh on-chain and trading indicators. Market watchers are pointing to extreme oversold signals on the daily Relative Strength Index (RSI) and deeply negative funding rates — both of which historically precede major rebounds.

The 1D RSI, a key momentum indicator, is now the most oversold it has been since Ethereum touched $1,350 back in April. Back then, ETH followed up with a powerful rally, and similar conditions are now in place. RSI this low typically suggests capitulation and the end of downward momentum.

Funding Rates Turn Deeply Negative

Adding to the bullish thesis, funding rates for ETH perpetual futures have dropped to their most negative levels since the “Tariff drops” — a period marked by sudden volatility and fear-driven trading. Negative funding implies that short sellers are paying long traders to hold positions, showing that the majority of traders are betting on further downside. Historically, when funding gets too negative, it often leads to a short squeeze.

Why Traders Are Going Long

These combined signals — oversold RSI and extreme negative funding — have encouraged some traders to start accumulating long positions. With sentiment at lows and technicals aligning for a bounce, this is being viewed as a high-risk, high-reward setup.

Some analysts are warning that shorting in this area is risky, as the potential for a sharp move higher is growing. If momentum shifts quickly, the move upward could be fast and violent, catching many off guard.

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