2020-08-10 2017-12-28 Ethereum is moving along waves 28.12.2017 Mikhail Hypov 2020-08-102017-12-28

In this article, the following kinds of analysis are applied: wave, indicator, trend, Fibonacci levels and volume.

Dear friends,

In this article, I’m going to continue predicting for Ethereum.

As I have written before, a five-wave momentum is clearly seen in ETHUSD chart.

However, unlike my expectations, the fifth wave didn't reach level 1000; not having approached even level 900, the price started being corrected.

Despite a classical wave scheme, wave (A) went down lower than the start of wave (5). This can indicate a triangle correction.

Due to a strong bullish trend, this correction can look like flat, contracting triangle correction ABCDE, where the support level will be the exponential moving average for three month.

In this kind of correction, wave (С) often equals to 0.618 of wave (A).

There is clear five-wave momentum in ETHUSD chart. Now, there is an expected correction. Where will it stop? Let’s try to find out.

If you look at a larger scale, this ratio indicates the target of 540-530 USD.

However, to be objective, we need to consider the signals of other indicators and tools of technical analysis.

Ichimoku indicator shows a reversal signal in 4-hour chart.

In the chart above, you can see that Chikou (a thin green line) outbroke the price line.

This signal indirectly confirms the start of a new correction wave.

If the ticker goes downwards, the Ichimoku cloud will be certain support for bulls, so a slight rebound is likely in the range of 700-650, there, bears can be held by Kijun line (dark-red), which often serves as the support level.

If we apply trend analysis and Fibonacci levels, we will see the following situation.

Ethereum price is moving in the ascending channel, where the ticker rebounded from the red dotted arrow and is moving to the channel lower border. There, bulls will meet certain support, due to which, the price zigzag line can rebound for some time.

The resistance levels along the circumference lines and levels from the third wave according to Fibonacci should discourage bulls.

If bears succeed and finally push the channel lower level down, then the next strong support will be exactly six-month trend line (a thick gray line)

It is unlikely to be outbroken unless there is a strongly negative background.

Therefore, if ethereum doesn’t manage to outbreak this level, the assumption of the developing ABCDE correctional cycle will be proved.

Let's have a look at MACD and RSI.

In the daily chart (see above), MACD is holding on a buy signal, and RSI hasn’t reached overbought level, which indicates a weak bullish trend.

In the four-hour chart, MACD has almost indicated bearish crossing of moving averages, and RSI is partially in the bear zone, which indicates a soon correction.

Finally, let’s pay attention to the trading volume.

As it seen in the chart above, the last rising wave isn’t supported by the trading volume at all. On the contrary, with each new step upwards, there are fewer and fewer people willing to buy.

Volume/price indicator shows price equilibrium in the range of 470-460 USD, so I think the nearest target at 560 USD to be quite reasonable.

I wish you good luck and good profits!

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