Ethereum’s price remains locked in a consolidation phase according to recent analysis, with the cryptocurrency still holding above a key support level but facing potential further downside.
In a latest update, analyst More Crypto Online examined Ethereum’s current market structure through the lens of Elliott Wave theory. They noted that Ethereum appears to have completed a 5-wave move higher to the target zone of $2,200+ (Wave 1), and is now likely undergoing a Wave 2 correction consisting of an ABC structure.
The A-wave pullback has already occurred according to the analysis, with the B-wave potentially still unfolding now. This means further downside may still eventuate for Ethereum’s price. As More Crypto summarized: “It seems like an A-wave is done, and a B-wave might be unfolding now….In this wave 2, I’m looking for an ABC structure, and this B-wave is likely at play now.”
Importantly, Ethereum continues holding above crucial support around $1,676. This leads the analyst to maintain a bullish assumption for Ethereum unless this level is broken. As they commented: “Our support is still at $1,676, so until we break below that, I don’t have to change my assumption here about this chart.”
The area of resistance to watch is set around $2,346 according to More Crypto. A daily close above this level would indicate the bull market structure is still in play and further gains could unfold. But for now, downside risks remain given the ongoing Wave 2 pullback.
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These Technical Factors Support Caution on Ether Price Action
In addition to the Elliott Wave analysis, there are also some other concerning technical factors emerging on Ethereum’s 4-hour price chart according to top trader Bluntz.
Bluntz highlighted the formation of five clear waves in Ethereum’s recent decline. Given extended waves often signal trend reversals, this suggests the current bounce higher from the lows could end up forming another lower high before the correction resumes. As Bluntz summarized:
“Beautiful 4h on $eth forming here with divs [divergences] on every timeframe from 15min up to 4h, only downside is theres now a clear 5 wave decline so this bounce although should be a nice 7-8% or so from the lows will likely end up being a lower high b wave.”
In other words, traders should be wary of getting overly excited about the current upwards relief rally in Ether, as downside risks clearly remain. A retest of the lows appears possible according to Bluntz’s analysis.
Key Takeaways: Caution on More Downside But Uptrend Still Intact
In summary, analysts are urging some caution around Ethereum near-term as its price correction likely still has further downside to play out before finding a bottom. But the key bull market support around $1,676 remains intact for now.
As long as this level continues holding, the overarching assumption is that the major Ether bull run will eventually resume after a healthy pullback shakes out overheated conditions. Therefore, while some added volatility is expected, Ethereum’s long-term uptrend appears safely secured as things currently stand.
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