The cryptocurrency market has been surrounded by bullish sentiment from the start of the year, and we saw triple-digit growth all across the space. Bitcoin paved the way, and many altcoins followed, later surpassing it, especially recently from September, making explosive and parabolic rises.
Meanwhile, the price of the largest altcoin – Ethereum, has been underperforming compared to many cryptocurrencies. It, too, saw a price appreciation but only 84% since the start of the year. Unlike many that have made new yearly highs, it stayed within its previous, completed in April of $2,150, and now, in November, it came just shy of it.
From November 9, when it came to $2,124, we saw a choppy price action lasting 18 days. As the price struggles at these levels, is this an indication of a looming reversal?
The price of Ethereum fell to $920 on June 18 last year. This was the completion of the downtrend from the all-time high of $4,852, resulting in 82% depreciation. A recovery started as it did across the whole cryptocurrency market, but unlike many cryptocurrencies, the price of ETH didn’t make a lower low.
Instead, it was on a continuous incline, initially coming to $2,000 on August 14 and later making a slightly higher high to around $2,150 on April 16, 2023. Its support level was ascending; the horizontal resistance around $2,100 formed an ascending flat triangle.
The last rise from October 11 was made from this ascending support at $1,530, but the price still found resistance at the same horizontal area instead of making another higher high. The flat zone proved to be strong, but if this whole ascending triangle structure was the starting formation of the larger bull phase, can we see a breakout to the upside?
Looking at the wave structure, there is a possibility that the whole ascending triangle is the starting impulse wave from the next bull phase for Ethereum’s price. This is known as the leading diagonal pattern in the Elliott Wave theory.
If this count is correct, the price increase ended for now on the last interaction with the horizontal resistance around the $2,100 area. In that case, we are ready to see a first bull market correction that will establish the first macro higher low.
Measuring with the Fibonacci retracement tool at its optimal level, we have a price target of $1,380. This corresponds to the horizontal support area, but the price can fall even further until this possibility is invalidated.
All in all, the price of Ethereum has most likely ended its last uptrend from mid-October and will now make a reversal. If this turns out to be the correction we are expecting, it would mark the completion of the first two bullish waves and indicate the start of a larger uptrend at the beginning of 2024.
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.