Ethereum (ETH) Prepares for Rally as Price Nears Bull Flag Conclusion
ETH price formed a symmetrical triangle after reaching its recent peak. Considering the price context it could be interpreted as a bull flag.
Key Takeaways
- Ethereum peaked at $3,450, marking the end of wave 3.
- Wave 4 consolidation hints at an imminent breakout.
- RSI indicates neutral momentum, allowing room for movement.
Ethereum (ETH) has strongly recovered since completing wave 2 on Nov. 4, establishing key support near $2,400.
A breakout above descending resistance led to a sharp rally, pushing the price to $3,450, marking the end of wave 3.
ETH is now consolidating within a symmetrical triangle near $3,100, potentially representing wave 4 and hinting at more upside continuation ahead.
Ethereum Price Analysis
The price of ETH on the daily chart shows a robust recovery after completing corrective wave 2 on Nov. 4, forming a solid support zone near $2,400.
The price broke out of a prolonged descending resistance trendline, confirming a trend reversal as it moved sharply to $3,450.
This completed wave 3 of the current five-wave Elliott structure, which we outline in our previous analysis.
ETH is now consolidating in a symmetrical triangle, potentially representing wave 4, with the price hovering near $3,100.
The Relative Strength Index (RSI) indicates a cooling momentum after an overbought condition during the previous uptrend, signaling a brief pause before the next significant move.
Considering the price context, the symmetrical triangle can be interpreted as a bull flag.
Since the price is approaching its apex, a breakout to the upside will lead to a higher high of around $4,000.
Key Observations:
- Wave 3 Completion: ETH peaked at $3,450, marking the end of wave 3 in the current impulsive structure.
- Wave 4 Developing: The symmetrical triangle suggests wave 4 is nearing completion, potentially leading to one more upward advancement.
- Neutral RSI: The RSI shows balanced momentum, leaving room for a breakout to the upside or further consolidation.
The completion of wave 4 will likely determine ETH’s next trajectory. A breakout above the triangle resistance would indicate the start of wave 5, potentially pushing the price toward $4,000 or higher.
Conversely, a breakdown below $2,900 could signal a deeper retracement before resuming the uptrend.
Ethereum Price Prediction
The hourly chart shows that the price decreased 13% from its Nov. 12 high of $3,450 to a low of $3,015 on Nov. 15.
A sideways recovery followed, leading to a high of $3,220 on Nov. 18, forming descending resistance.
However, in its retracements, the price kept higher low, forming ascending support and thus a symmetrical triangle.
Two scenarios are possible, depending on whether or not the higher-degree wave 4 ends inside the symmetrical triangle or has one more sharp decline ahead.
Firstly, a breakout above the triangle would confirm the start of wave 5, potentially leading to a new high of $4,000.
Conversely, a breakdown below the triangle support could extend wave 4, leading to a deeper retracement level, with its first target set at the 0.5 Fib at $2,840.
Key Levels to Watch
- Immediate Resistance:
- $3,140 (0.236 Fibonacci retracement of wave 3).
- $3,450(previous local high near wave 4).
- Immediate Support:
- $2,969 (0.382 Fibonacci retracement of wave (iii)).
- $2,843 (0.5 Fibonacci retracement).
- Upside Targets:
- $3,700 (wave 5 coming shorter.
- $4,000 (psychological resistance and extended Fibonacci level).
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