Is Ethereum Poised for a Surge to $5000?
The second-largest cryptocurrency, Ethereum (ETHUSD), reached its peak in March this year, experiencing a nearly 50% decline since then. However, it’s essential to note that ETHUSD hit its lowest point over two years ago on June 18, 2022, and surged by 365%. Therefore, the current downturn falls within the usual fluctuations seen in the crypto world, prompting the question, “Has the Bull market that began from that low concluded?”
A favored analytical approach is the Elliott Wave Principle (EWP), which indicates that major market movements consist of five waves (1, 2, 3, 4, 5), while corrective phases involve three waves (a, b, c). The drop from the March high to the recent low is best interpreted as three waves: W-X-Y. This pattern is illustrated in Figure 1, showing the daily candlestick chart of ETH with various technical indicators.
ETHUSD is encountering resistance at the $2725 level, which corresponds to the January 2024 high (marked by a dotted black horizontal line), with five recent attempts to surpass it in the last six days. Therefore, this level is crucial for the Bulls to reclaim on a daily closing basis. The colored rectangles on the chart indicate potential upside targets based on simple symmetry, calculated from each breakout level.
The projected targets upon breaking out are as follows:
– 1st target (blue): approximately $2900, aligning with the green 20-day SMA
– 2nd target (grey): upon a daily close above the 1st target, around $3025
– 3rd target (orange): upon a daily close above the 2nd target, approximately $3100
– 4th target (red): upon a daily close above the 3rd target, about $3325
While these targets are not certainties, they represent the most probable upside scenarios following breakouts, given the importance of symmetry. Confirmation of these breakouts would enable a more reliable EWP count for the rally from the recent low. However, distinguishing between the “low in” scenario and the potential for “one more 5th wave lower” remains challenging at this stage, as depicted in Figure 2.
The colored warning levels in each chart or option serve as guidelines until one scenario is confirmed, indicating warning levels for the Bulls or Bears based on the chart’s EWP. These levels are regularly shared with premium members to signal potential shifts in market sentiment.
Maintaining a long-term bullish outlook on Ethereum, the cryptocurrency is anticipated to continue its bullish trajectory towards the $10+/-2.5K range in 2022, provided it holds above $2150.
