Ethereum (ETH) Elliott Wave Analysis: Reversal Shortly Expected

Ethereum’s price action showcases a critical phase, with Elliott Wave patterns and Fibonacci levels converging to indicate potential scenarios. While consolidation persists on higher time frames, shorter-term charts highlight the possibility of a bullish breakout.

ETH Price Analysis 

On the daily chart, Ethereum consolidates within a descending triangle, with the current price action at $3,073 near 0.618 Fibonacci retracement after completing a larger wave 3 impulsive structure on Dec. 6

This high corresponds with its last year’s in March when ETH first came to the $4,080 area. It was followed by a correction that led to a low of $2,130 in August. The price consolidated forming a symmetrical triangle around $2,500 before it finally made a breakout in November.

Its latest peak retested was last year’s high and found resistance again, making a sharp downturn and proceeding to form a descending triangle The triangle’s base aligns with the 0.618 Fibonacci retracement level at $3,012, providing a pivotal support zone. Despite recent bearish attempts, the Relative Strength Index (RSI) remains neutral, reflecting market indecision. This consolidation suggests that ETH is at a crossroads, awaiting a decisive breakout.

The descending triangle follows a sharp impulsive rally, emphasizing the importance of this consolidation phase. A break above the upper boundary near $3,420 (0.382 Fibonacci) would confirm a bullish continuation toward $4,081, aligning with prior highs. Conversely, a breakdown below $3,012 (0.618 Fibonacci retracement) may trigger a bearish trend targeting the 0.786 level at $2,721 The RSI’s current levels imply limited momentum, demanding confirmation via volume or price action.

The larger Elliott Wave structure suggests that the ongoing triangle corresponds to a corrective Wave (4), typically preceding a final impulsive wave (5). If bullish momentum prevails, ETH could resume its upward trajectory, targeting the completion of Wave (v).

ETH Price Prediction

The 1-hour chart shows that the Elliott Wave count within the descending triangle could be a completed ABCDE correction. The recent decline appears to form a final corrective Wave (e) near the triangle’s lower boundary around $3,070.

The hourly chart RSI is sitting at the oversold region suggesting that a reversal from this area looks more likely. This sets the stage for a potential bounce and a breakout transitioning into Wave (i) of the next impulsive phase.

If ETH breaks above the triangle’s resistance near $3,420 (0.382 Fibonacci), the immediate Wave (i) target lies at the 0.618 Fibonacci extension of $3,552, followed by the 0.786 extension at $3,641. 

After a slight pullback that should serve to retest the broken resistance for support on its wave (ii) around $3,220, we can expect to see further uptrend continuation. Should the price maintain a higher low on this expected pullback, our next target for wave (iii) would be at $4,082 at the 1.618 Fib extension, which would be another interaction with the yearly high. 

A corrective wave (iv) may retest $3,755 (1 Fibonacci extension), offering a higher low for bullish continuation and finally a decisive breakout above $4,000 area. Wave (v) could extend toward $4,285 (2.0 extension) or $4,429 (2.272 extension), marking a significant upside from current levels.

However, failure to maintain support at $3,012.6 (0.618 retracement) could invalidate the bullish count, triggering a deeper correction toward $2,721 (0.786 retracement). RSI momentum and breakout volume will be key indicators to monitor, as any divergence could signal a reversal or continuation.

Key Levels to Watch

Resistance Levels:

• Immediate: $3,420 (triangle resistance and 0.382 Fibonacci retracement).
• Short-Term Target: $3,552 (0.618 Fibonacci extension).
• Secondary: $3,641 (0.786 Fibonacci extension).
• Key: $4,082 (1.618 Fibonacci extension).
• Major: $4,285 (2.0 Fibonacci extension), $4,429 (2.272 Fibonacci extension).

Support Levels:

• Immediate: $3,220 (expected retest during Wave (ii)).
• Critical: $3,012.6 (0.618 Fibonacci retracement).
• Deeper Support: $2,721 (0.786 Fibonacci retracement).
• Invalidation Zone: Below $3,012.6, indicating further downside risk.