Ethereum’s Countertrend Rally Should Ideally Reach $4000, but Bulls Beware

Ethereum Elliot Wave Analysis

In last week’s Elliott Wave Principle (EWP) based update, see here; I concluded for Ethereum (ETH), “expect a pullback before ETH moves higher again into the ideal red- and black target zones. Think $3700-4000. I have anticipated a countertrend rally in ETH since late January to “ideally about $4250+/-250.” ” Fast forward and ETH dropped over 12% since its April 3^rd high into today’s low. Bingo, so far so good, no surprises, which my premium crypto trading members do not like either.

Regular followers of my work know I prefer the “see the forest through the trees” approach: zoom out to larger time frames and the EWP waves will pop out much more easily, increasing the tools’ accuracy and reliability. Figure 1 below shows the weekly chart, with a focus on what ETH has been doing in the green box.

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

ETH Technical Analyses

As my premium crypto trading members know, any correction always consists of at least three Elliott waves: wave-a, wave-b, and wave-c. In this case, we are looking at a countertrend rally, i.e., corrective rally/dead cat bounce (black wave-b in Figure 1), of the November through January decline before the next leg lower starts (black wave-c).

Thus, this black wave-b will comprise three smaller waves: red (intermediate) waves a, b, and c. The former two have, IMHO, already been completed and the latter is underway. C-waves most often comprise five smaller waves, and so far I can only count three waves up from the red b-wave low made in February.

Thus, I expect soon a final (green) minor wave 5 to ideally $4000 (green dotted arrow). That will then complete the larger b-wave bounce at the typical 62% retrace of the initial decline before the larger c-wave can start. Note the green dotted arrow represents a typical 5=1 relationship. However, please note ETH has already reached the heart of the ideal b-wave/bounce target zone at last week’s $3580S high and reversed this week. Thus technically it has done enough to consider the counter-trend rally complete.

ETH Price Forecast

ETH has now technically done enough to consider the counter-trend rally complete. However, a last smaller 5^th wave rally to ideally $4000 would look best as that would complete a five-wave C-wave off the February lows. A drop below $3000 will be the first sign $4000 may not be reached and a retest of the low-2000s should then be expected.

Meanwhile, a break back above $3600 from about current levels does set its sight on this key level. That will then at long last fulfill my call since late-January that ETH would target $4250+/-250 for a counter-trend rally. It has taken its sweet time, but I do not control the markets and time is not of the essence. What matters is the price as we now have clear if/then scenarios in place to know what will happen next on a breakout vs breakdown. Trade accordingly.