Ethereum Ready for a Pullback?

Less than two years since its launch on July 30, 2015, ethereum has already become the second largest cryptocurrency in the world, with a market capitalization of roughly $4.5 billion, trailing only to bitcoin’s $20 billion. We are definitely not the people to ask how exactly the blockchain technology works, but ethereum’s decentralized nature means its price is governed by people’s optimism and pessimism about it. That is why we believe the Elliott Wave Principle can help us find out at what stage the cycle of emotions currently is, in order to predict the next phase. ETHUSD’s logarithmic price chart below will help us with the task.
ethereum
The chart shows ethereum’s entire uptrend from December, 2016. According to the theory, the direction of the trend can be confirmed by recognizing a five-wave pattern, called an impulse. So far, ethereum’s rally is not an impulsive, because its fifth wave is still missing. Nevertheless, we think it is just a matter of time before it completes the pattern and confirms the virtual currency is in a long-term bull market. On the other hand, every impulse is followed by a three-wave correction in the other direction, before the trend resumes. In other words, instead of joining the bulls now, the Wave Principle suggests we should wait for a noteworthy pullback in wave (2), which might drag the price of ethereum down to the $30 area, thus significantly reducing the risk and maximizing the growth potential. Until then, staying aside is preferable.

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