Ethereum and XRP Elliot Waves Analysis: The Corrective Phase is Nearly Done

XRP Elliot Waves Analysis

The chart highlights XRP’s recent price movements, which are structured within an Elliott Wave framework. Following a parabolic surge, the asset completed a five-wave impulse to a high near $3, signaling the conclusion of a bullish cycle. Currently, XRP is consolidating in a descending triangle pattern, with its next direction hinging on the breakout.

XRP is trading near $2.20 after a 6% drop, approaching the descending resistance. The daily Relative Strength Index (RSI) reflects declining momentum, indicating a reduction in buying pressure. This could either be a pause before a trend continuation or the onset of a reversal, depending on market conditions and volume during the breakout.

Traders should monitor XRP’s position within the triangle for a volume-driven move. A breakout above the triangle might lead to a bullish continuation targeting previous highs, while a breakdown could trigger a bearish retracement toward lower Fibonacci levels.

The chart also suggests XRP is undergoing a corrective phase following its impulsive rally. The corrective structure appears as a W-X-Y complex pattern, with the price currently testing support near $2.10. This indicates a potential downside before a bullish recovery.

Fibonacci retracement levels (0.382, 0.5, and 0.618) are essential for identifying key support and resistance zones during this correction. The next potential downside target is around $1.90 at the 0.618 retracement level. If this support holds, it could pave the way for a bullish reversal, potentially initiating a new impulsive wave toward prior highs.

The RSI shows weakening momentum, reflecting bearish pressure. However, a bounce within the $1.90–$2.00 range could form a higher low, suggesting the start of a reversal. Volume confirmation at these levels will be critical for validating breakout or breakdown scenarios.

Key Levels to Watch

• Immediate Resistance: $2.28 (0.382 Fibonacci retracement).
• Current Support: $2.10 (horizontal level).
• Critical Downside Support: $1.90 (0.618 Fibonacci retracement).
• Upside Target: $2.50 (0.236 Fibonacci retracement).
• Breakout Target: $2.89 (prior high and 0 Fibonacci level).
• Breakdown Risk: Below $1.90, a potential move to $1.63 (0.786 Fibonacci retracement).

ETH Elliot Waves Analysis

On the 4-hour ETH chart, we can see that it has completed a clear five-wave impulsive structure at a yearly high of $4,083 on Dec. 13, followed by a corrective phase marked as an ABC pattern. The price currently hovers near $3,345 and is attempting to break out from a descending resistance line, with RSI showing slight upward momentum suggesting a potential rebound.

On Dec. 20 the price fell to a low of $3,100 which could have marked the completion of the ABC correction. This corrective structure has reached a critical support zone of around $3,209 (0.5 Fibonacci retracement), which aligns with previous demand zones. A bounce here could confirm a higher low, initiating the next potential bullish wave. However, further downside toward $3,004 (0.618 Fibonacci retracement) cannot be ruled out.

If ETH successfully breaks above $3,519 (prior high), it could confirm a new impulsive wave targeting $3,666 (0.236 Fibonacci level). Failure to break resistance may lead to consolidation, keeping ETH within the current range or retesting lower Fibonacci retracement levels for further support.

Momentum indicators like RSI show a potential bullish divergence, but price action and volume confirmation is essential. Traders should watch for decisive moves near the key resistance and support zones to gauge ETH’s next direction.

Key Levels to Watch

• Immediate resistance stands at $3,519 (0.382 Fibonacci retracement).
• Critical support is around $3,209 (0.5 Fibonacci retracement).
• A breakout above $3,666 could target higher levels near $4,075 (prior high).
• Breakdown risk lies below $3,004, targeting $2,713 (0.786 Fibonacci retracement).
• RSI indicates potential bullish divergence, needing confirmation through price action.