Bitcoin’s jaw-dropping run over the last few weeks has made many people euphoric. Some are starting to predict that the leading cryptocurrency will hit $60,000 in this bull cycle. Claims like this often signal that a local top is in. If that’s the case, those who took profits at current levels might move their capital to other crypto tokens. A stellar candidate to be the recipient of this capital flow might be Ethereum. It appears that others share this bias.
A popular Elliott Wave technician that goes by the name Benjamin Blunts looked at Ethereum and saw a striking resemblance between its 2017 price action and today’s market structure. On June 15, The Elliottician took to Twitter to illustrate the potential bullish setup of the cryptocurrency.
According to the analyst, Ethereum sparked a massive bull run after it broke out of a symmetrical triangle in 2017. The same setup appears to be in the works, as Benjamin Blunts wrote, “I think I’m having deja-vu here.”
Another key detail that the analyst saw between the two charts is the declining volume from wave A to the apex of the triangle. Decreasing volume while the market is in consolidation is bullish. It typically indicates that sellers are losing ammunition. Thus, when price contracts at the apex and sellers are drained, demand overwhelms supply to ignite a breakout.
In the tweet, the trader also emphasized that the key level to break is $302. As of this writing, Ethereum is trading above $302. If the analyst is correct, we could expect fireworks soon. Others echo this sentiment.
Trader and analyst Luke Martin recently shared his thoughts on Twitter about Ethereum. He said that if bitcoin struggles to go above $11,200, he expects the No. 2 cryptocurrency to “go on a tear” and touch $340.
In fact, $340 appears to be a conservative target. An analyst with a pseudonymous account has a target that’s close to the price set by Benjamin Blunts. CryptoFella expects Ethereum to go as high as $835.38.
Ethereum could hit the target prices given by Benjamin Blunts and CryptoFella. A quick look at the weekly chart shows that from a perspective of a classic chartist, the cryptocurrency could take out a key resistance area.
A move above $385 with heavy volume could further launch Ethereum into the sky. That would trigger the breakout from a large rounding bottom pattern on the weekly chart and mark Ethereum’s trend reversal from the macro perspective.
Above $385, the only remaining resistance is the weekly supply area that’s between $850 – $900. Therefore, regardless of whether you’re using classical charting, counting waves, or looking at fractals, we still arrive at the same target price. That’s one of the many beauties of technical analysis. You can capture and look at human behavior from multiple lenses.
We looked at Ethereum from different angles and came up with the same conclusion: the market could be getting ready for fireworks. For the Elliott wave trader, liftoff has already been achieved as the market is trading above the key level of $302. For classical chartists like CryptoFella, Ethereum is threatening to blastoff.
Ethereum may be headed to the target of $900.
Last modified: June 23, 2020 7:37 PM UTC