Is Ethereum Still on Track for $2800?

In my article on Ethereum (ETH) from early last week, I found using the Elliott Wave Principle (EWP), “ETH should now be in red wave-v of black wave-3, which should ideally target $2340-2595, … 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. See Figure 1 below.”

ETH peaked at $2547 on April 16 for wave-3, declined to $1975 on April 18 for wave-4, and is now already making new all-time highs (ATHs), and wave-5 is gunning for $2700-2855. Thus, except for a lower wave-4 than anticipated ($2035-2190 was the target zone, see Figure 1, with $2160+/-35 ideally), ETH has so far followed the path I expected ten days ago -black dotted arrows- very well. It is simply impossible to be 100% accurate in a non-linear, stochastic environment, but this is the accuracy and reliability my premium crypto members take advantage of.

Figure 1. ETH daily EWP count and technical indicators.

The Rally to as High as $2860 is Now Underway

As you can see, once Fibonacci-based EWP target zones are reached, strong reactions occur, and ETH is no exception. Since the $1975 low did not overlap with the wave-1 high at $1941 on March 13, the standard impulse pattern is alive and well because, in a motive wave, the 1^st and 4^th waves are not allowed to overlap. Thus, as ETH is now on its way to the ideal $2700-2855 target zone, which it can overshoot, it is time to look at the technical indicators. As you can see in Figure 1, the red dotted arrows show ETH is moving higher on A) less strength: lower daily RSI5 readings, B) less momentum: lower daily MACD readings, and C) less liquidity: lower Money Flow readings. These divergences fit with a rally that should peak soon before a much larger correction is expected.

Bottom line: The rally to new ATHs is underway as anticipated, and ETH has adhered rather well to the Fibonacci-based EWP path I outlined early last week. Thus $2775+/-100 should still be doable, with an ideal target zone of $2700-2855. Once reached, I expect a sharp multi-week decline back to the critical support at around $1400+/-100, an almost 50% haircut before ETH is ready to stage its next multi-month rally, ideally to $4500+/-500. A move and close below this week’s low at $1975 from current levels or higher will signal this deep correction is underway.

For a look at all of today’s economic events, check out our economic calendar.