Relief Rally Ahead? Oversold Ether Eyes Gains Against Bitcoin

Things may be looking up for Ethereum's native token, ether.

At the time, ETH was extremely oversold, with the 14-day relative strength index at record lows.

A corrective rally was overdue and, accordingly, ETH has created a minor double-bottom bullish reversal pattern as seen on the chart below.

What's more, ether was trading above the neckline hurdle of $418 earlier today, signaling increased odds of a corrective rally to $475. However, today's drop in bitcoin prices from $7,100 to $6,700 seems to have played a spoilsport.

ETH backed off from the daily high of $430 and is currently trading at $392. So, ether has failed to hold on to gains above the double bottom neckline.

Still, ETH is holding well above the recent low of $358 and could close above $418 if BTC regains poise.

There is always a risk of bitcoin extending losses further and the ether-U.S. dollar exchange rate chart will likely follow suit.

ETH bulls risk being trapped on the wrong side of the ETH/USD market.

Still, the ETH's oversold status could work in its favor against bitcoin - i.e. ether will likely outperform bitcoin, irrespective of any bitcoin bull/bear move.

It also means that ETH has effectively appreciated by 4 percent against bitcoin.