Ethereum dropped nearly 24% on Thursday to hit $275. The following looks at what could happen next based on the Elliott wave theory.
June 28, 2019 | AtoZ Markets - The cryptocurrency market has had an incredible year so far. Ethereum peaked at $365 on Wednesday after gaining over 350% since the $82 December low. Meanwhile, price retreated quite quickly on Thursday. Ethereum still remains the 2nd largest cryptocurrency on Coinmarketcap based on market capitalization.
After the Thursday selloff which wiped off nearly $70 billion from the market, there is a bit of calm across the board on Friday. Ethereum is having a minor recovery from $275 to $310. Most of the week's profit is gone and investors will hope price remains above $300 to maintain a net positive week and at least a 25% gain in June after hitting 42% at $365 earlier in the week.
After such big rallies seen since December, it's expected that there would be profit taking and thereby a bearish correction. The corrections that are seen so far in the build-up to the current bullish trend are minor and shallow. A major bearish correction will happen at any of the prices below the all-time highs before the bullish trend continues. The current sharp decline after an impressive April-to-June rally could be the start of a much deeper bearish correction.
Ethereum analysis: important price levels
The current dip could continue to $265 and $233 which are critical Fibonacci potential support levels. The bullish trend should pick up from there. On the contrary, if the current dip is all there will be, a break above $365 will see Ether around the $500 round figure.
Ethereum price prediction: Elliott wave perspective
From the perspective of Elliott wave theory, price is completing a bullish impulse wave which is a viable way of analyzing a trend. In the last update, we expected a 4th wave dip after the 3rd wave rally. The chart below was used.
Wave 3 extended further to $365. The current dip is expected to complete the 4th wave as the new chart below shows. In addition, from a price action perspective, the weekly candle is closing below 295 and would attract further bears.
The 4th wave could continue to $260 or even retest the $225 low before pushing further upwards toward $475-$500.