Ethereum: Still on Track for Higher Prices
The cryptocurrency bottomed on Black Friday, November 26th, and has since staged the best rally since its all-time high (ATH) was made earlier in the month with, so far, five consecutive up days. Thus it appears a critical bottom was struck, and the weekly chart below shows an alternate EWP-count to the one I showed in my several previous updates, but still equally Bullish.
Figure 1. ETH weekly chart with EWP count and technical indicators.
As long as Black Friday’s low of $3925 holds, Ethereum can target $5500-6400.
The weekly chart reduces the noise of all the daily upside and downs. By simply assessing down weeks as corrective waves within a more significant uptrend, it appears ETH completed (green) minor waves 1, 2, 3, and 4 of (red) intermediate wave-iii, which in turn is part of the large (black) major-5 of (blue) Primary III. As I always tell my premium crypto trading members, in my daily video updates
“The beauty of the EWP is that we know with certainty after wave three come waves four and five. Thus as long as the wave four pullback does not infringe in the wave one high, we must anticipate another wave five higher.”
Thus, if Black Friday’s low of $3925 holds the tentative but preferred (green) minor wave-4 low, then Ethereum can target $5500-6400. That price target zone is the next Fibonacci-extension zone for (green) minor wave five and typical for a 3rd wave, i.e., (red) intermediate wave-iii. It is unknown where this wave-iii will top at this stage, but once this next leg higher gets going in earnest, I can narrow it down. Also, here the “after three come four and five” pattern applies. Namely, when (red) intermediate wave-iii tops, we must expect wave-iv and v.
From a technical perspective, there are negative divergences on the Relative Strength Indicator (RSI5), MACD histogram, and Money Flow Indicator (MFI14), dotted red arrows, but not on the actual MACD line. Thus, the former two suggested the more significant wave-iv correction is looming when wave-5 of wave-iii completes, whereas the latter allows for that wave-5.
Besides, the price of Ethereum is still well above its rising 10-w simple moving average (SMA), as well as the 20-w, 50w, and 200-w. Thus the trend is 100% bullish on the weekly chart. Last but not least, ETH is also well above the rising (green) Ichimoku cloud, which also signals a 100% bull trend.
Bottom line: The “anticipate ETH to bottom around $3800+/-200 before staging its next rally” perspective was correct as ETH bottomed at $3925 last week and has since rallied to within spitting distance of the recent ATH. Thus, as long as that low holds, ETH can stage another impulse (5-waves rally) to ideally the $5500-6400 target zone before the subsequent multi-week correction unfolds. Once that impulse rally is confirmed, I can narrow down the target zone more as there’s currently too little price data available. Meanwhile, the weekly chart shows us ETH is still in a 100% Bullish uptrend and as such, a bullish perspective is preferred.