Ethereum Elliot Wave Analysis
Two weeks ago, I showed Ethereum’s (ETH) trend was not friendly and that “… one should be (very) cautious on the long side and maybe even forego buying ETH until the trend is more friendly and provides Low Risk (LR) entries. Therefore, current buying is High Risk (HR), especially since the SMAs are bearishly stacked: the 10d SMA is below the 20d< 50d SMA< 200d SMA.” Fast forward, and ETH has dropped a whopping 41% since. I hope you headed my warning.
That brings me to my early April article, where I shared my Elliott Wave Principle (EWP) analyses. I was (since January of this year) looking for a bounce to ideally $4250+/-250, but warned that “A drop below $3000 will be the first sign $4000 may not be reached, and a retest of the low-2000s should then be expected.”
ETH even overshot that downside target as it bottomed at $1714 today. Talk about the EWP as a powerful tool in knowing what will happen when a certain price level breaks to the upside or downside. My premium members rely and bank on these insights.
All that being said, what’s next for ETH? Well, the anticipated path, see Figure 1 below, has come to pass and fruition, and ETH has now reached the ideal downside target zone for the potential wave-IV I am tracking.
Figure 1. Ethereum Weekly chart with detailed EWP count and technical indicators.
The c-wave potential materialized.
C-waves are made up of five smaller waves. In this case, waves i, ii, iii, iv, and v. Although not shown here as the weekly chart doesn’t allow for such detail, ETH should now be wrapping up wave iii. Shorter-term, i.e., over the next few days, ETH can still wrap up some smaller 4th and 5th waves (of the minute and minor degree) to complete the higher-degree intermediate-iii wave, but technically wave-iii has done enough. Thus, it is time to start looking for that wave-iv bounce to ~$2450+/-50K, which should be a multi-day event.
Because of the EWP, we know waves four and five come after the third wave. Thus, when wave-iv is complete, ETH should do one last stab lower for wave-v to ideally ~$1500+/-100. That will wash out even the most stubborn Bulls and allow ETH to get ready for its next Bull run.
Bottom Line and Ethereum Price Forecast
Two weeks ago, I concluded, “ one should be (very) cautious on the long side and maybe even forego buying ETH until the trend is more friendly.” I was correct as ETH lost >40% since. The C-wave, C is for Crash, is underway. It should bottom out soon, allowing for a brief rally back to ideally around $2450+/-50, followed by a last 5th wave lower to ideally ~$1500+/-100. These price targets are based on currently available price data and will be updated accordingly when new price data becomes available.