Ethereum (ETH) Reaches $3,760 Target Before Dipping 4% — Uptrend Losing Momentum

Key Takeaways

• Ethereum confirmed a breakout above $3,200, solidifying the bullish structure.
• Overbought RSI indicates the potential for a wave (iv) correction.
• Critical levels include $4,000 (0.618 Fibonacci) and $5,181 (wave (5) extension).

Ethereum (ET) has demonstrated a strong recovery, breaking out from its wave (4) low near $2,100 and rallying past key resistance at $3,200.

This advance marked the development of wave (iii) within a larger Elliott Wave structure, with the price peaking at $3,764 on Dec. 1, reflecting renewed bullish momentum.

With the Relative Strength Index (RSI) entering the overbought territory, Ethereum now shows signs of entering a corrective phase before potentially resuming its uptrend.

ETH Price Analysis

The daily chart of Ethereum (ETH/USD) showcases a strong recovery from the wave (4) low near $2,100. This marks a clear, impulsive advance within a larger Elliott Wave structure.

The current rally has breached significant resistance at $3,200, establishing a strong wave (iii) within the developing wave (5) to a high of $3,430 on Nov. 12.

This move aligns with renewed bullish momentum, supported by the breakout from a descending triangle pattern that had been limiting price action.

Its next advancement started on Nov. 20, which was considered its lower degree wave (v), and reached a high of $3,764 on Dec.1, our projected target in the previous analysis.

The Relative Strength Index (RSI) is entering overbought territory, suggesting that this advancement has reached its limit. 

Key Observations

• Wave (iii) Breakout: Ethereum has confirmed a strong breakout above $3,200, signaling the development of wave (iii) within wave (5).
• RSI Overbought: The RSI reflects overbought conditions, indicating a possible wave (iv) consolidation phase in the near term.
• Critical Fibonacci Levels: Key targets lie at $4,000 (0.618 Fibonacci) and $5,181 (wave (5) extension)

ETH Price Prediction 

The hourly chart illustrates the completion of a five-wave impulsive structure, peaking near $3,764, suggesting a potential local top.

Following this high, the price action indicates the early stages of a corrective ABC wave pattern, which could retrace to key Fibonacci levels for support.

We saw a 4% dip, which isn’t the only sign of weakness. The diminishing momentum in the previous rise also signaled the weakening of the uptrend. This adds to the likelihood of a short-term pullback.

The price tests immediate resistance levels, with the potential for consolidation before a decisive move to resume the uptrend or initiate a deeper correction. Today’s dip looks like a rejection, but further confirmation is needed. 

If our assumption turns out to be true, the ETH price could continue falling to some of the Fib retracement levels, of which 0.382 at $3,240 would be the most optimal. 

Key Levels to Watch

Support Levels:

• $3,440 (0.236 Fibonacci): Initial support for a shallow correction.
• $3,243 (0.382 Fibonacci): Secondary support within the correction is crucial for maintaining a bullish structure.
• $3,083 (0.5 Fibonacci): A deeper retracement level and strong accumulation zone.

Resistance Levels:

• $3,759: Recent high marking the wave (v) completion, key for resuming upward momentum.
• $4,000: Psychological resistance aligning with the next Fibonacci extension target.
• $4,400 (0.618 Fibonacci extension): Long-term resistance and potential wave extension target.

Holding above $3,440 will be critical for confirming a shallow correction and potential wave (b) retracement within the ABC pattern.

Conversely, failure to hold above $3,083 could indicate a more prolonged consolidation phase before the broader uptrend resumes.