Ethereum: Five-wave impulse complete – Correction to $1,700 before rally to $2,450

In our July 2 update, when Ethereum (ETHUSD) was trading at ~$1,700, we found by using the Elliott Wave Principle (EWP) and Technical Analysis (TA) that

“…the weight of the evidence points toward the formation of an important low … price needs to confirm this thesis by ultimately breaking back above … $1,848, with a serious warning for the Bears on a move above $1,777.”

Fast forward to three weeks later, and ETH has reached as high as $1,955, in what counts best as a five-wave impulse move higher. See Figure 1 below.

Figure 1: short-term Elliott Wave count for ETH with several technical indicators

Our previous call for higher prices was correct, and we have tracked the potential for five (gray) waves (i, ii, iii, iv, v) higher for our premium members since. These five waves appear to have completed, though one last rally to ~$2,050+/-50 cannot be excluded just yet.

Based on current price action, we view Ethereum as most likely in a short-term corrective pullback, gray W-ii, to ideally $1,700+/-25 from where the next rally to approximately $2,450+/-50 can start.

Thus, in our previous update, we correctly showed that the setup was promising, as the weight of the evidence pointed toward the formation of an important low. Now we anticipate a brief pullback that must always stay above the June low, with a serious warning for the Bulls below $1,643 to allow for the next leg higher.