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Over the past two months, as last noted in our previous update, Ethereum’s Elliott Wave pattern has continued to unfold in line with our long-term expectations, suggesting the completion of the larger fourth wave earlier this year and signaling that the fifth wave is now underway. See Figure 1 below.
Figure 1. Long-term Elliott Wave Count for Ethereum.
In the short term, since the February low, the Elliott Wave structure suggests a rare leading expanding diagonal is forming as the first wave, an uncommon but bullish configuration, which requires a few more steps before we can consider it complete. See Figure 2 below.
Figure 2. Short-term Elliott Wave Count for Ethereum.
Moreover, Ethereum has moved back above its 20-day, 50-day, and 100-day Simple Moving Averages (SMA). Additionally, Ethereum has broken above the persistent downtrend line that had capped its upside since last October (blue horizontal arrow). This breakout provides further confirmation of a strengthening bullish trend and increases confidence in the ongoing upward movement.
Final resistance is at the upper edge of its Ichimoku Cloud ($2395). A break above that level can target the gray 200% extension at $2626 and the 200-day SMA, which is now at $2910 and declines by about $10 per day. The 200-day SMA will thus reach $2626 in less than a month.
Lastly, the Bulls don’t want to see Ethereum’s price back below the downtrend line, as that will mean the breakout did not hold, while a move below the red, final warning level at the March 29 low of 1938 tells us the building bullish potential has failed.
