close icon

Ethereum Made a Decision the Bulls Won’t Like

A month and a half ago, Ethereum was hovering in the vicinity of $340 a coin. The bulls seemed unstoppable after lifting the price by over 320% in six months. Unfortunately, an invisible threat was brewing under the surface.

Instead of simply extrapolating the recent uptrend into the future, we thought it appropriate to take a look at the situation through the prism of the Elliott Wave principle. It presented us with not one but two possible outcomes. Both of them called for “at least a partial decline of 25% to 30% to around $250.” The more bearish of the two, published on June 26th, is given below to refresh your memory.

Elliott Wave patterns makes Ethereum drop like a rock

The 4-hour chart of ETHUSD revealed that the rally from $80.90 had a three-wave corrective structure. It was labeled (A)-(B)-(C), where wave (B) was an expanding flat and wave (C) was very extended.

According to the theory, once a correction is over the larger trend resumes. Since Ethereum was in a downtrend prior to this recovery, it made sense to expect a bearish reversal as soon as wave 5 of (C) ended. Even if we had labeled the sequence as (1)-(2)-(3) in anticipation of a complete five-wave impulse, a significant pullback in wave (4) to at least ~$250 was supposed to occur.

Ethereum Bears Smashed the Support near $250

20 days later, on July 16th, ETHUSD fell to $190. The second largest cryptocurrency lost almost 48% of its market cap in less than a month. Instead of trying to explain why this happened after the fact, Elliott Wave analysis put traders ahead of it.

Ethereum still hasn’t been able to recover from last month’s crash, trading around $210 as of this writing. Let’s see if the updated chart below can help us find out what lies ahead for ETHUSD.

ETHUSD to form a bearish Elliott Wave impulse

The updated chart shows that Ethereum is on the verge of completing a five-wave impulse pattern to the south. The guideline of alternation has been taken into account, since wave 2 is a running flat, while wave 4 is a simple zigzag.

If this count is correct, wave 5 down is still missing. Once it reaches the $180-$170 area, the entire impulsive wave (1) will be complete. Then, we should expect a three-wave recovery in wave (2) before the downtrend can resume in wave (3).

Ethereum might appear cheap compared to its recent high and even cheaper in relation to its all-time record. However, judging from its charts, the possibility of ETHUSD falling even further must not be underestimated.

What will BTCUSD bring next week? That is the subject of discussion in our next premium analysis due out late Sunday!

Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

The Bears Rule Over Ethereum Under $225

We last wrote about Ethereum on August 9th. The second largest cryptocurrency had plunged by 42% in less than two months and was hovering around $210. Unfortunately, our Elliott Wave analysis of the decline from $363 pointed to more weakness ahead. See the chart below to refresh your memory. This chart was included in our…

Read More »

Staying Two Weeks Ahead of Bitcoin ‘s Crash to $8000

The price of Bitcoin has been slowly losing ground since late-June when it touched $13 880. The bulls have been relying on the support near $9000 for over two months. They no longer have that luxury. BTCUSD was still gravitating around $10 000 on September 23rd. The next day, it plunged to $7998. While the…

Read More »

Bitcoin Fulfills Yesterday’s Bearish Elliott Wave Setup

The price of Bitcoin plunged sharply on Wednesday and keeps falling early Thursday. BTCUSD reached an intraday high of $10 280, before crashing to as low as $9555 yesterday. Today, the bears are still in charge and managed to drag the price to $9320 so far. To sum it up, Bitcoin lost almost $1000 per…

Read More »

Litecoin Lost 50% in Two Months. Is the Pain Over?

Litecoin, the fifth largest cryptocurrency, lost more than half of its market value in the past two months. Between June 22nd and August 21st, LTCUSD fell from $146 to $70. Since crypto assets have no intrinsic value, investors often compare the current price to its higher level some time ago. This leads them to the…

Read More »

How Bitcoin Almost Collapsed Last Month

The price of Bitcoin returned above the $12 000 mark two days ago. As of this writing, the biggest cryptocurrency is still trading in the vicinity of $12k and the larger uptrend appears to be still in progress. Less than two weeks ago, things were not looking so rosy. BTCUSD was hovering around $9500 in…

Read More »

Ethereum Price to Face an Important Decision Soon

Bitcoin has been unstoppable in 2019 and the old “to the moon” chatter is getting louder and louder once again. Ethereum – the second biggest cryptocurrency – has been delivering generous returns since the start of the year, as well. ETHUSD, currently hovering around $343, is up 325% from its December 2018 low of $80.90.…

Read More »

Overbought TRON Can Tumble 30% Against Dollar

TRON became the 7th largest cryptocurrency by market cap following a 135% surge in the last month. It surpassed Litecoin and Stellar on its way up and is now within a striking distance of Tether in the sixth place. TRXUSD’s recent performance can easily convince investors it is time to join the bulls. The problem…

Read More »

More analyses