Ethereum’s Intermediate-term Elliott Wave Review

Earlier Ethereum Elliott Wave Analyses

In my earlier replace, see here, I reviewed the shorter-term Elliott Wave Principle (EWP)-count for Ethereum (ETHUSD). I discovered,

“The Bullish depend is most popular if ETH can keep above ~$1050 and rally again above $1250. Nonetheless, if ETH closes beneath $1050, it opens up the door to $900, and from there, ~$850 is the most definitely very best draw back goal. ”

ETH didn’t keep above $1050 and dropped to $997. It then rallied again to $1275 however by no means closed for the day above $1250 and, as such, fell again to $1005 yesterday. It’s now buying and selling at across the $1130s. Thus, it did not rally and keep above $1250 however has discovered patrons on the $1000 stage every time. Ethereum is now caught between a rock and a tough place: see here.

Nonetheless, is it doable ETH can nonetheless go decrease? The weekly chart I final shared in Might, see here, has been up to date. The perfect path pointed to a low within the $1500+/-100 zone, however the last waves determined to subdivide/prolong. As at all times, all we are able to do is “anticipate the perfect path,” then we “monitor to see if worth follows it or not,” and if not, then we should “regulate.” Why? As a result of we’re coping with a stochastic, probabilist surroundings and never one thing that’s set in stone.

Determine 1. Ethereum weekly chart with detailed EWP depend and technical indicators.

$870 Can’t Be Excluded Simply But

Given ETH already dropped to $880 on June 18, it’s definitely doable for the cryptocurrency to have bottomed already. The traditional, very best, customary c=a extension (See Determine 1 above) targets $870. However, the cryptocurrency should shut above that pesky $1250 stage with out falling again beneath $1000 to counsel the low is certainly in place, and the run to ~$10K has begun.

Cash Stream Indicator

I wish to deal with the at present oversold Cash Stream Indicator (MFI14) on this replace. See Determine 2 beneath.

Determine 2. Ethereum weekly chart with MFI14. Be aware the log scale.

It at present sits at 9.7. It means virtually everybody has offered, and shortly solely shopping for is left, matching public sentiment as a result of most retail merchants are bearish on cryptocurrencies pondering they may all go to $0. In the meantime, ETH and different currencies are nonetheless buying and selling at wholesome ranges. Certainly, retail predominantly buys excessive and sells low as a result of such merchants are primarily emotional, i.e., following hypes. As an alternative, goal analyses like these must be taken into one’s buying and selling and funding selections.

The final time this indicator was beneath 20 was in February (orange field). Again then, ETH rallied for just a few weeks into November 2014, gaining over 60%, solely to drop one other 60% to the current lows. There are solely two extra comparable events for Ethereum: August 2018 and December 2016. Purple and black containers, respectively. Within the former case, ETH dropped ~60% after which rallied >6000%. Within the latter case, ETH rallied somewhat instantly >21800%.

Backside Line

Thus, though previous efficiency is not any assure for future outcomes, if historical past is of any information, then the draw back danger vs. upside reward could be very favorable for individuals who wish to play the longer-term recreation. Moreover, if ETH goes to say the $10K stage, the upside reward from present ranges is round 1000%. Such beneficial properties match effectively with the identified “legislation of diminishing returns” cryptocurrencies face for every new Bull run because of their logarithmic development curve, i.e., 21800%->6000%->1000%.