Ethereum Testing 23.6% and 38.2% Fibonacci Support of Wave 4

Ethereum (ETH/USD) is showing strong bullish momentum as mentioned last time. The angle of the uptrend has only accelerated recently (blue arrows).

However, yesterday’s daily candlestick closed as a Doji which indicates indecision. Is this a first sign of a reversal? Let’s review.

Price Charts and Technical Analysis

The ETH/USD uptrend seems too strong for a reversal to take place now:

1. The gaps between the moving averages (MAs), the angle of the MAs, and the gap between price and the 21 emas all indicate a strong uptrend.
2. The Doji daily candlestick indicates indecision and it is more likely to create a potential sideways pullback (grey arrow) or retracement (orange arrow) in the uptrend.
3. The support zone (blue box) is likely a bouncing spot (blue box) for more upside (green arrows).
4. Only a deeper retracement places the bullish outlook on hold (orange) or invalidates it (red circle).

On the 4 hour chart, price action made a bearish pullback to and bounce at the 23.6% Fibonacci retracement level:

1. After completing a 5 wave pattern (blue) in wave 3 (orange), price action is probably building a wave 4 pullback (orange).
2. The 23.6% and 38.2% Fibonacci retracement levels remain key for the potential wave 4 (orange) pattern.
3. A bull flag pattern (grey arrows) could indicate a shallow pullback and uptrend continuation (blue arrow).
4. A deeper pullback (orange arrows) will probably test the Fibonacci support levels.
5. The targets of the uptrend are located at $4750, $5000, $5500.
6. A break below the 50% Fib places the uptrend on hold (yellow button) whereas a deeper retracement invalidates it (red button).

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

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