Ethereum: We got the “Pullback, Rally, Significant Pullback.” Expect a Rally Soon

It has been a month since I last provided my Elliott Wave Principle (EWP) based insights into Ethereum (ETH), so it is time to continue the story. Back then, see here and here, I was looking for a more minor degree 4^th wave pullback to ideally $2865, then a 5^th wave rally to complete a larger 1^st wave top at ideally $3585, followed by a more significant 2^nd wave pullback to ideally $2400-2600. See Figure 1 below.

What transpired? Ether had a complex (red) intermediate wave-iv to $2952 (August 18 low), an extended -subdividing- wave-v to complete (black) major wave-1 at $4026on September 3, and ETH dropped to as low as $2678 on Tuesday, September 21. Albeit the cryptocurrency did not adhere to the ideal/textbook path, the overall pattern forecasted over a month ago, and in fact, already drafted early August (see here), came to fruition.

IMHO there is no other and better method available than the EWP to know what path lies ahead, even almost two months in advance! Hence, my premium crypto trading members are always well-aware of the course that lies ahead, giving them a tremendous edge over those who do not. They are also aware that we are dealing with a probabilistic environment. All we can do is anticipate the ideal/textbook path, monitor the price action to see if it adheres, and then adjust as necessary. In this case, only a few adjustments were required. So what’s next for Ethereum?

Figure 1. ETH daily chart with EWP count and technical indicators.

The “pullback, rally, significant pullback” came and went. Wave-2 looks about complete

Corrections always are made up of at least three waves: an initiation move down (wave-a), a dead-cat bounce (wave-b), final leg lower (wave-c). In this case, see Figure 1, I can identify three (red) intermediate waves (a,b,c) since the $4026 high made September 3. Depending type of correction (zigzag vs. flat vs. triangle vs. complex), the c-wave is often about equal in length to the a-wave, measured from the bounce (b-wave) high.

Here c=a targeted around $2800. ETH bottomed at $2678, which is well within reasonable margins of error. The recent two-day rally can still be a smaller degree 4th wave of this c-wave: green minor-4, but it is unnecessary. If it is, ETH will fall below $2678 one last time, target the 62.8% retrace of wave-1 at $2575 and then reverse higher.

Remember, back in August, I forecasted, “…a multi-week correction, wave-2, should unfold. It can target anywhere between $2145-2865 depending on how deep or shallow this wave-2 will become. It is impossible to know beforehand. However, typically 2^nd waves retrace about 50-62% of the entire prior 1^st wave, so I anticipate for now -without having any data at hand yet to confirm a bottom in the $2380-2590 zone (orange rectangle). Once more price data becomes available, I can fine-tune this pending and anticipated low.”

Bottom line: In an uncertain world, one can not expect me to foresee every move and every tick weeks beforehand. But with the EWP, I was able to have an excellent idea of what was ahead for ETH weeks in advance and to a degree of accuracy, no other method IMHO can. Thus, my wave-1,2 forecast has been of the “so far so good” type, if I may say so myself. If $2678 was all she wrote, I consider that forecast complete and will start to look for the setup towards $9000. If $2678 does not hold, expect a trip to $2575. Ethereum will have to drop below that level to suggest a trip back down to the recent summer lows that can still be in the cards.

For a look at all of today’s economic events, check out our economic calendar.