I see no reason to turn bearish until the price breaks below the 10-w SMA ($3830 and rising) for starters.
Last month, see my most recent article here, using the Elliott Wave Principle (EWP) I was looking for Ethereum (ETH) to
“ideally top [for wave-i] out around $4000 +/- 200. Then intermediate wave-ii [to ideally around $3350 +/- 50] should take hold for several days before the heart of the third wave kicks in wave-iii. [to ~$7500.] The wave-ii will essentially be the last good time to “load up the boat,” “back up the truck,” etc., as buyers will step in quicker than you can say lift-off.”
Fast forward, and ETH topped a day after my last update at $4373 and then bottomed on October 27 at $3921 and has since rallied relatively unabated as it is now trading at new all-time highs (ATHs): $4850s. See Figure 1 below. Thus, my top and bottom call was a bit off, but it fits the general narrative of what I concluded last time “… the “mild wave-ii pullback” should materialize soon.” It certainly was a mild pullback, but I warned my premium crypto trading members of this throughout to ensure they would be on the right side of the trade as much as possible. Besides, as I always mentioned, “in bull markets expect upside surprises, and downside disappointments” and “all we can do as traders and analysts is to anticipate, monitor, and adjust.”
Figure 1. ETH daily chart with EWP count and technical indicators.
3rd of a 3rd wave should now be underway.
The daily price action can often be a bit noisy and confusing, and it is therefore essential to zoom out. Here I use the weekly chart for ETH and can better show the preferred path forward. See Figure 2 below.
Figure 2. ETH weekly chart with EWP count and technical indicators.
The larger Elliott waves pop out nicely on the weekly chart, and using ideal, standard Fibonacci-based, it follows that (green) wave-3 of iii of 5 of III should top around $5000-5400, then a wave-4 back down to $4100-4450, etc. Ultimately, the 200.00% extension (albeit not shown here on the chart due to limited available space) is the ideal wave-v of 5 of III target projects to $7300+. However, Ethereum is known to see extended 5th waves, so $9K+ remains on tap.
Besides, the technicals are all looking good on the weekly chart.
- Price is above the rising 10-week simple moving average (SMA), which in turn is above the increasing 20-w SMA, etc. This pattern is shown in the upper left corner with my “traffic light.” When it is green, the price action is bullish: be aggressive on the long side.
- All the technical indicators are pointing up.
- Price is riding the upper Bollinger band.
Thus, the weekly chart is simply 100% Bullish. As such, the chart tells me to be bullish over the intermediate-term (weeks to months) and to prefer the bullish EWP count as shown. I see no reason to turn bearish until the price breaks below the 10-w SMA ($3830 and rising) for starters.
Bottom line: The “mild wave-ii pullback” I anticipated three weeks ago to “materialize soon” came and went and was much less than expected. But, by zooming out, I continue to remain Bullish on ETH using the weekly chart as I have been for many months. E.g., back in May, when ETH was trading in the low-$2000s, I was anticipating “upside potential from current levels is now most likely 500+%.” It has since simply been a matter of how exactly this path would fill in. Thus, “the last low-risk buying opportunity before it rallies to $7500 and ultimately to $9000” came and went. The ideal Fibonacci-based wave extensions are looking for $7300+, and for now, I will focus on that target to keep my premium crypto trading members on the right side. Any extensions of the waves to as high as $9K+, will be the cherry on the pie.