Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Is Ethereum Currently in a Corrective Phase? Where to Next?

Published 02/02/2024, 12:32 PM
Updated 07/09/2023, 06:31 AM

Ethereum (ETHUSD) topped on January 12 at $2717, a day after Bitcoin topped on the approval of spot Bitcoin exchange-traded funds (BTC-ETFs). A classic “buy the rumor, sell the news” event? Since then, ETHUSD has moved lower quickly, bottomed out at $2165 on January 23, a 20% drop, and has since recovered some of its losses. Because we can count five waves up (orange 1, 2, 3, 4, 5) from the low struck October 2023 to the January high, we should expect three waves (orange a-b-c) lower to correct that rally before ETHUSD can move higher again: See Figure 1 below.

Figure 1. The daily resolution candlestick chart of ETH with several technical indicators

ETH Chart

In our previous update, see here, we found

Moreover, ETHUSD is still above its rising (blue) 50-day simple moving average (50d SMA) since the rally from the October 2023 low started. Thus, we continue to have our parameters in place [for a larger correction].

1. A daily close below the 50d SMA … followed by,

2. A daily close below $2135.

Since ETHUSD has broken below its 50d SMA, although not yet below $2135, we assign the following Elliott Wave Principle (EWP) count to ETHUSD.

  • The January 23 low was orange W-a of grey W-ii.
  • Price is currently in orange W-b to ideally $2450.
  • Once reached, ETHUSD should ideally correct for orange W-c of W-ii to ~$1950.

Our contingencies are as follows.

  • If ETHUSD moves below the January 23 without reaching ~$2450, first, we must consider the orange W-b already complete at the January 30 high of $2391.
  • If ETHUSD continues to rally and breaks out above the January 12 high without going below the January 23 low, the grey W-iii is already underway to at least $4400.

We cannot predict the future, but with the EWP, we know above or below which price levels, specific patterns, and paths become operable. Moreover, if we are correct, ETHUSD is currently in a corrective phase: the dreaded B-wave. These are the hardest to forecast, so we must watch the aforementioned price levels closely to know where we are in the EWP.

Latest comments

Without having a trusted person to help you make it huge in investing dose sound good to me , my wife just made me happy since morning I haven't been able to keep down the happiness in heart I have nothing to say then God bless you for the payout form the last investment ...his wasp. (+)31612574318). 100101001010101010010101010010101010101010100101010101010101010010101010101010010101010110101010101010101010100110102020201010101010101010101001101001101010101010101010101001101010101010101010101010011001011011010101
Thanks for the analysis. I'm interested in giving Ethereum a try. More so below 2000.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.