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Ethereum (ETH): Further Upside Extensions Elliott Wave Technical Analysis #eth

Ethereum (ETH): Further Upside Extensions? Elliott Wave Technical Analysis #eth

Hello and welcome to another update on Ethereum. This is a quick update since not much has happened since my last update yesterday. The market has spent the weekend in sideways consolidation. We've seen a reaction to the orange micro-support region, and as long as it holds, there is no evidence that a top has formed. An additional upside extension in wave C of five of one would look better, in my opinion. Reaching 3,660 or higher would be ideal to get a clear fifth wave in yellow wave 1, leading to a clear five-wave pattern that would make everyone happy.

However, if we see a break below 3,450—the micro-support lower boundary line—as well as below the Tuesday low last week at 3,350, it would be a different scenario. I would give the Bulls the benefit of the doubt and assume that we're either in wave E of the triangle in purple. This larger triangle, which includes the A-wave, B-wave, C-wave, D-wave, and E-wave, ideally should not break below the yellow support zone, even if the E-wave tests the July lows around the 2,800 area.

If we consider that wave four could have bottomed on the 5th of July, then the pullback could be seen as Wave 2 in the yellow scenario. Practically, there wouldn't be much difference in both scenarios; I'm watching for a higher low. For clarity, one more high into the target region would be preferred.

Bear in mind that Bitcoin has already reached its target region, yet there is no definite signal for a top. So, while cautious, there isn't a need to be short-term bearish yet. I think it's rather time to be bullish because Bitcoin has formed a five-wave move to the upside. Pullbacks can be shallow due to this. A clear five-wave move up on the ETH chart would benefit from another extension.

Remember, we might not need five waves up as this could simply be wave D in purple of a triangle, and these are corrective structures. I'm continuing to follow the trend for higher values until, for example, the Tuesday low breaks. That would be a signal we're either coming down in wave two, which would be an ABC structure, or in wave E, which would also be an ABC structure. Both scenarios would end up with a third wave to the upside.

After the completion of an Elliott Wave triangle, we normally watch for a rapid upside move. Triangles generally break to the opposite side of an E-wave, leading to an aggressive third wave up. The ideal breakout signal would be above the swing high formed, which isn't clear yet.

We need to recognize that, according to Elliott Wave guidelines, a strong surge usually follows the end of a triangle in the opposite direction of wave E. If it's a third wave up that's unfolding, it too would be quite aggressive. Not much more to say except that only a break below 2,956 would change my view and suggest that new lows might come, shifting probabilities. For now, however, this rally has been substantial enough to indicate a potential bottom. Although some charts like Solana are a bit overextended and Bitcoin has reached its fifth-wave minimum target, no confirmed top is in place yet.

This update on Ethereum indicates that while we should be cautious, there's no confirmation of a top yet. We should continue observing the levels mentioned for potential pullbacks or higher progressions in price.

Keywords

  • Ethereum
  • Elliott Wave Analysis
  • Sideways Consolidation
  • Micro-Support Region
  • Breakout Signal
  • Bullish
  • Wave C of Five of One
  • Target Region
  • Third Wave Up
  • Swing High

FAQs

  1. What does the sideways consolidation in Ethereum mean?

    • Sideways consolidation indicates the market is not showing clear direction either up or down but is moving within a range.

  2. What are the critical support and resistance levels to watch for Ethereum?

    • Watch for the micro-support at 3,450, the Tuesday low at 3,350, and the critical level at 2,956.

  3. What will indicate that a top has formed in Ethereum?

    • A confirmed break below the critical support levels mentioned would suggest that a top might have formed.

  4. What is the significance of the Elliott Wave triangle in Ethereum’s price analysis?

    • An Elliott Wave triangle indicates a corrective phase, and its completion is usually followed by a strong surge in the opposite direction.

  5. Why should investors be cautiously bullish on Ethereum right now?

    • Bitcoin has formed a five-wave move to the upside, suggesting shallow pullbacks for Ethereum and the potential for higher price extensions.

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