close icon

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. Such impressive gains can make it seem as if making money in the markets is easy. However, experienced traders know that the easy money is the hardest to keep.

Instead of simply extrapolating the recent strength into the future, let’s take a look at Ethereum through the prism of the Elliott Wave principle. The chart below suggests the situation is more complicated than it looks.

Ethereum chart reveals an Elliott Wave impulse in the making

Market prices move in repetitive patterns, called waves. Cryptocurrencies, although much more volatile, are no exception. The 4-hour chart above reveals the structure of Ethereum ‘s entire recovery from $80.90. It appears to be a three-wave sequence, labeled (1)-(2)-(3) here, where the sub-waves of wave (3) are also clearly recognizable.

If this count is correct, wave 5 of (3) is almost over. Let’s assume the current surge is going to evolve into a five-wave impulse pattern. We can expect a three-wave pullback in wave (4) to drag ETHUSD to the 38.2% Fibonacci support level near $250. Once there, another rally in wave (5) towards ~$400 would have to complete the pattern.

Ethereum Can Choose a Much More Bearish Alternative

Unfortunately, fifth waves are never guaranteed. The alternative count below shows what happens if the 2019 recovery turns out to be corrective.

Ethereum price chart Alternative Elliott Wave count

It is possible that the 2019 rally is nothing more than a three-wave correction within the larger downtrend. In that case, we will have to relabel the three waves from (1)-(2)-(3) to (A)-(B)-(C), as shown above. According to the theory, once a correction is over the larger trend resumes. For Ethereum this means that if the market picks this scenario, the $250 support area cannot be relied on to stop the bears.

In conclusion, the structure of Ethereum ‘s 2019 rally shows that three waves have already be made. In the Elliott Wave world this calls for at least a partial decline of 25% to 30% to around $250. Traders should then keep both possibilities in mind and leave the tough decisions to the market.

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:

Should You Buy Solana? What the Charts Say

Solana just cracked the top ten biggest cryptocurrencies with a market cap of just under $21 billion. The rumored Ethereum rival is up 235% in the past month alone after a steep ascent from $22.11 to as high as $75 so far today. Does this mean it is time to join the bulls and invest…

Read More »

Ahead of the Bitcoin Curve Since the Tesla Let-Down

The last time we wrote a free article about Bitcoin was on May 13th. The price of the biggest cryptocurrency had just plunged from over $57k to sub-$46k after Tesla CEO Elon Musk tweeted the company will no longer accept it as payment. As we showed in that article, the Tesla disappointment was just a…

Read More »

ETHUSD ‘s Bearish Elliott Wave Cycle Almost Complete

The time between May 12th and May 23rd is a period ETHUSD bulls would want to forget. The second largest cryptocurrency fell from an all-time high of $4380 to as low as $1730. While some might consider crypto to be gold 2.0, crashes like that one reveal that the space is still a wild west…

Read More »

Bitcoin Bears Needed a Catalyst. Tesla Obliged

Tesla CEO Elon Musk announced the company would stop accepting Bitcoin as payment due to environmental concerns. The EV-maker’s Bitcoin stunt lasted for just three months, apparently the time it took for its CEO to realize how inefficient and energy-consuming BTC mining is, something we wrote about in March. The price of Bitcoin, of course,…

Read More »

Harmony Coin Draws Bullish Elliott Wave Setup

Bitcoin, Ethereum, Dogecoin, you name it. There are already thousands of cryptocurrencies in existence, most of which serving no other than speculative purpose. The fact that even the big guys on Wall Street can’t resist the urge to dip their toes in the space only makes retail investors more confident. We remain skeptical. Today, however,…

Read More »

ETHUSD Wave Pattern Can Disappoint the Bulls Soon

For the crypto space, it is 2017 all over again, except bigger. The two biggest cryptocurrencies – Bitcoin and Ethereum – exceeded their previous records and then some. ETHUSD, in particular, is now approaching $2600 and is not very far from doubling its January 2018 peak level. Furthermore, ETHUSD is up 32-fold from its December…

Read More »

Bitcoin Can Never Be a Global Currency. Here’s Why

Bitcoin’s relentless rise in the past year forced even some its most vocal critics to throw in the towel. Kevin O’Leary, for example, used to call Bitcoin “garbage”, but recently said that he has 3% of his portfolio in BTC and ETH. And indeed, many, us included, have been calling Bitcoin a bubble for years,…

Read More »

More analyses