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Dr. Arnout Ter Schure
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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.

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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.”

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