Eh. I am used to Souls games (even did an SL1 run in Dark Souls) so I'm not one that typically picks babby difficulty or anything, but Oath was my first Ys game and I played on Normal and it felt challenging enough to me. Most normal enemies were never a threat (with a few exceptions) but almost every boss killed me at least once, some 10+ times (usually with super close fights though, the number of "noooooooooooooooooooooo I HAD YOU" moments were rather common
). I don't know if I was underlevelled each time or not, though. One boss in particular kept wrecking me so bad and I wasn't even getting the "so close" moments, so I sucked it up, grinded 1 level, and then came back and pwned her.
It's crazy how a single level makes a difference between "ridiculously hard" and "hardly threatening", sometimes.
That said, other games after that felt much easier and I kind of regret not picking them on Hard, at least. Maybe Origin is harder on Nightmare, but on Normal, Oath seems like the hardest one so far*. Like, in Celceta none of the bosses have killed me, though some of the monster extermination side-quests have rekt me several times. If I ever replay some of those games I'll pick Hard, or I might even pick Nightmare, but not in Oath, no way. xD
* I have played, in that order: Oath in Felghana, I & II Chronicles, Ark of Napishtim, Origin, and NP Celceta