How High Can Ethereum Go Before the Next More Significant Pullback?

Wrapping Up The Smaller 4^th and 5^th Waves

Over the last month, see here; our primary expectation for Ethereum (ETH) has been for it to move higher as the Elliott Wave Principle (EWP) continued to identify five waves up and three waves down sequences from the November 2022 low. Last week we then found that “A break out above $1350 must be considered Bullish if the December lows hold” and that “The first order is to break out above the December 2022 highs ($1350) in an impulse fashion (five waves), ideally targeting the November 2022 highs at around $1675.”

Fast forward, and the Bulls broke ETH above $1350 resistance on January 11, causing ETH to reach as high as $1606. As such, the anticipated rally to the next resistance level at the November 2022 high of $1671 is unfolding. See Figure 1 below. ETH should now be in (blue) nano W-iii of (orange) Micro W-3 of (grey) Minute W-iii of (green) Minor W-1; alternatively, red W-c.

Quite the mouth full, but it simply means there’s still upside potential left with an ideal target zone of $1950-2250, depending on the exact Fib-extension of each wave. Meanwhile, our crypto-trading-bot alerted our premium members to buy ETH on January 3, see here, and continues to hold, supporting the notion of further upside.

The Bullish Resolution Continues, but $1350 Needs to Hold

Due to the breakout above $1350, we can now move our primary-expectation-invalidation level from $1074 to that price level. However, the strength of the current rally (RSI14 at 85, MACD at 85, and the Money Flow Index at 100, see the technical indicators in Figure 1) is quite typical for a 3^rd of a 3^rd wave and does not support the idea ETH will break below it any time soon. Although a minor pullback should commence soon to alleviate some of these extreme readings, it must be considered a little 4^th wave at this stage, and thus a “low risk-buy the dip” opportunity.

Thus, the Bulls are now out of the woods. They should be able to target $1950-2250 with an ideal target of $2100+/-100. Once reached, we must expect a more significant pullback, which should hold above $1350. If it does not, we should expect ETH to enter triple-digit territory one last time. But for now, our primary focus is the low-$2000s.