Ethereum Gunning for $2800?A month ago, when ETH was trading in the mid-1700s, I was looking for $1200+/-100 and then a run to $3000.
In my previous article on Ethereum (ETH) from four weeks ago, I looked for as low as $1200+/100 in ETH before the next rally to new all-time highs (ATHs). All ETH gave us was, however, $1549 on March 23. Although in Bull markets, “downside disappoints and upside surprises,” that shallower than expected pullback meant we’re dealing with another impulse move higher. See Figure 1 below.
Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Figure 1. ETH daily EWP count and technical indicators.
A rally to as high as $2860 should be expected
Using the Elliott Wave Principle (EWP), I now label the late February low as a 4th wave (blue IV), and blue wave-V is now underway. It is subdividing into five smaller waves, in black. Waves-1, 2 have already been completed, and wave-3 is now underway, which should ideally target $2340-2595. As you can see, wave-1 consisted of clean and clear five smaller waves (red waves-i, ii, iii, iv, and v), and so does the current wave-3. The target zone is based on standard Fibonacci-extensions for 3rd waves: 1.382 to 1.618 times the length of wave-1, measured from the wave-2 low.
ETH should now be in red wave-v of black wave-3. This wave can even move beyond the target zone, but for now, all I can go by is “the known unknown,” i.e., standard Fib-extensions, as U.S. Secretary of Defense and congressman Donald Rumsfeld once said.
But what I do know is in an impulse move, wave-4 always follows wave-3, and wave-5 always follows after wave-4. Thus, once wave-3 completes -ideally- in the target zone, wave-4 should bring ETH back to around $2160+/35. From there, wave-5 should target $2775+/-100 to finalize the larger blue wave-V. I then expect a retest of $1450+/-75, an almost 50% haircut, before the next significant, multi-month rally starts. The above-described path forward is exemplified by the black, red, and green arrows in Figure 1.
Bottom line: A month ago, when ETH was trading in the mid-1700s, I was looking for $1200+/-100 and then a run to $3000. Although the anticipated path of lower and then higher was correct, all ETH gave us was a drop to the mid-1500s and now the rally to new ATHs is underway. Besides, it means I am adjusting my upside projection based on the current price action slightly to $2775+/-100. But remember, in Bull markets, downside disappoints and upside surprises. So I will continue to monitor the price action to see if ETH decides to deviate from the anticipated path. Because all we can only do is “anticipate, monitor, and adjust.”
For a look at all of today’s economic events, check out our economic calendar.