Ethereum’s Short-Term Elliot Wave Count Remains Bullish

The rally from the June 18 low looks even better

Last week, see here, I shared with you that per the Elliott Wave Principle (EWP), five waves appear to have been completed, and I expected another move higher after a pullback. However, the price action up to then was as such that I shared

“Albeit not shown on the chart, the alternative EWP count at this stage is to see another rally to the $2100+/-100 target zone for another 5th wave, which would make the mid-June low the major (blue, Primary-IV) low.”

When applying the EWP correctly, i.e., objectively, one must always have a preferred and an alternate wave count because financial markets are probabilistic. Thus, the alternative EWP count provided the scenario/context to know what would happen on a breakout. This breakout has now happened; hence “another 5^th wave to ideally $2100+/100” is now underway. See Figure 1 below.

Figure 1. Ethereum daily chart with detailed EWP count and technical indicators.

Upside surprises are Bullish

In Bull markets, the upside surprises (extensions of the up waves) and downside disappoints (2^nd and 4th waves) as buyers step in. Thus, today’s breakout means last week’s alternate EWP count is now the preferred option. Figure 1 shows Ethereum (ETH) is trying to break back above the June-July, 2021 lows at $1700.

If it holds, the next level to look for is $2200+/-100 as that is the next resistance zone. This level fits well with the projected wave-5 target (green arrow). What I like about the current EWP count is that ETH’s low on June 18 now aligns with that of Bitcoin (see here and here).

Thus, if ETH can stay above last week’s low of $1561, it should be able to target the low 2000s. From those higher levels, I anticipate the cryptocurrency moving down along the red dotted arrows to ideally $1400+/-100. And from the EWP, we know that after five waves up and three waves down (red i/a, ii/b), expect another leg higher. So the next more significant pullback should be a great buying opportunity.