RSI above 70 means momentum is strong, not that a reversal is imminent. In fact, overbought markets often continue climbing if institutional demand remains. The real risk is pullbacks, not crashes. Ethereum could have tested $2,500 despite the RSI spike.
Ethereum's MACD was bullish with an expanding histogram. That means momentum was accelerating, not peaking. The overbought RSI was a *sign of strength*, not weakness. This is what professionals see that retail traders miss.
Extreme overbought conditions usually precede 5-15% pullbacks, not 40% crashes. In August 2026, smart money was trimming at $2,400-2,450, not shorting. The pullback is an exit, not a reversal.
Monitor Ethereum's 4-hour RSI. When it drops below 50, momentum has truly faded. That's when pullback risks become real. Until then, overbought is just a sign to tighten stops, not panic-sell. Use it as a trim signal, not a crash signal.
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