The overall cryptocurrency market has witnessed a significant surge, with its capitalization soaring by 30% from its September 11 low, touching a new yearly high of $1.26 trillion. This slight edge over its previous peak in April underscores the market’s bullish momentum.
Bitcoin, leading the charge, has set a fresh yearly record, outpacing its previous best by 11%. Altcoins, too, have been on a tear, with some, like MINA, registering eye-popping gains of up to 120%.
In contrast, Ethereum‘s performance, while commendable, hasn’t quite matched the fervor seen in other coins. Since October 11, it has appreciated by 21%, a respectable figure but somewhat muted compared to the broader market’s exuberance. Currently trading around $1,800, it remains 15% shy of its yearly peak of $2,100.
Ethereum’s trajectory since its June 18 low last year has been relatively more optimistic than many of its peers. It embarked on a recovery journey, marking a higher low in November and subsequently achieving a higher peak in April compared to its August high.
Post its $2,100 zenith, Ethereum managed to maintain its value above the $1,500 threshold, charting its course within a descending channel. This resilience stands in stark contrast to several altcoins that plummeted to new bearish lows post-April.
This descending trajectory Ethereum found itself in likely represented a corrective phase, characterized by a five-wave pattern. However, the tide seems to be turning. Starting from October 11, Ethereum has been exhibiting bullish signals, culminating in a breakout from this channel.
The rise of Ethereum from November 21 to mid-April presents an analytical conundrum. The movement, characterized by a five-wave impulse, is somewhat ambiguous in its interpretation due to the higher low on November 21.
This could mean that the surge is merely an extension of the previous ascending structure, rendering it a corrective phase rather than a new bullish cycle.
However, there’s an alternative, more optimistic perspective. If we consider this rise as a smaller segment within a broader framework, it could be interpreted as just the initial sub-wave of a more extensive five-wave impulse.
Under this assumption, the descending channel that followed would represent the second wave of this larger cycle. If this interpretation holds, Ethereum could be poised for a significant upward trajectory. Wave 3, in this context, could propel the price to around $3,310. And if the momentum sustains, wave 5 could push the price even further, breaking previous boundaries.
Given the undeniable corrective nature of the descending channel, the odds currently favor a continuation of the upward trend for Ethereum. But does this imply an imminent new yearly high?
The current high, just a touch above $2,000, remains shy of the July 14 peak. By the tenets of technical analysis, this positions Ethereum in a downtrend since mid-April.
However, a breach above the $2,000 mark, resulting in a higher high, would disrupt this bearish narrative. Such a move would not only signify a reversal of the downtrend but also set the stage for a potential new yearly high. Conversely, if the current surge falters and pivots into a decline, Ethereum might be subjected to further losses before it can embark on a genuine bull run.
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.