Where can we expect Ethereum’s rally to $6,000+ to pause?

In our last update from a month ago, we shared two Elliott Wave (EW) Principle views, both leading to much higher prices for Ethereum (ETHUSD), and one of which was

“…the red W[ave]-i to peak at … approximately $3,000 for ETH. From there, we can still expect a deeper red W-ii to ideally be around $2,250 +/- $75, before the red W-iii kicks in. However, the bears will need to push the price back below … $2385 to initiate this alternative.”

ETHUSD peaked at $2,879 on June 11, fell to $2,213 on June 22, and is now trading around $3,400. See Figure 1 below. Therefore, anyone following our analysis, such as our premium newsletter members, would have had one last low-risk/high-reward setup in late June, which has now played out. Moving forward, we should look for corrective pullbacks along the way to at least $4,500+.

Figure 1. Our preferred short-term EW count for Ethereum

In this case, we expect the first short-term top to materialize around the red 100% Fibonacci extension, approximately $3,600, for the gray W-iii—a typical 3^rd of a 3^rd of a 3^rd wave target. The subsequent multi-day gray W-iv correction should ideally stall out at around the 76.40% level ($3250ish) before the gray W-v aims for the 123.60-138.20% extensions ($3955-4175), etc. We don’t see a more severe (multi-week) correction play out until the red W-iii has been completed at ideally the 161.8% level: ~$4525.

How does this fit into the bigger picture, one may ask? Remember, three months ago, we demonstrated that Ethereum was nearing the end of its downtrend.

“…. [it] can still wrap up at least one more set of 4th and 5th waves to the ideal $1085ish target zone to complete the more significant (black) 4th wave. However, if ETH moves above at least the 50-d SMAs, the DT line, and $2093 without making a lower low first, we must consider the four-month-long downtrend complete and look towards the low $6000s over the next several months.”

Ether failed to reach that target, having bottomed out at $1,384 on April 9, and then moved above its 50-day SMA and downtrend line, thus indicating that the rally to $6,000+ was underway. That target was set based on the large Bull flag pattern that was forming. See Figure 2 below.

Figure 2. Our preferred long-term EW count for Ethereum

Applying the short-term to intermediate-term wave count to the price action in Figure 2 (red Fibonacci extensions), we see that the ideal (200%) 5th wave (red W-v) target for the rally from the April low is approximately $5095. The pennant formation targets $6140, and therefore, there is already a reasonable agreement between the two. Additionally, 5^th waves in cryptocurrencies tend to extend, and a 300% Fib-extension targets the $6190s, which aligns even better.

Lastly, Ether has now moved above its 10 to 50-month SMAs as well as its monthly Ichimoku Cloud, signaling a renewed long-term uptrend, adding weight to the evidence for much higher prices to come.