Ethereum price is making another rally since 12th September just like other major Crypto coins. Have we seen this kind of rally before? What often happens afterward? The following price forecast is based on technical analysis.
The price of Ethereum (ETH) has gained slightly more than 50% since making a new yearly low of $165 on 12th September. This is also happening to Bitcoin. The rally just looks corrective and could be likened to many others that we have seen this year that precede a new low. Is the price preparing for a new 2018 low after the current rally ends? In a bearish trend, selling the rallies is a very popular and effective strategy used by traders to get profits from the market. Let’s look at how to prepare for the next bearish opportunity if it comes. The chart below shows ETHUSD corrective phase since November 2017 bullish breakout to the all-time price peak.
From the top, price is making a wild bearish correction – a deep one. Ethereum price is currently at the triangle-congestion zone where it broke upside last year. The first and second legs of the correction, wave W-X were very sharp and fast. On the other hand, wave Y has been slower and more gradual with shallower bounces. At the end of each bounce/rallies, the price eventually continued downside to make new lows. Currently, the current bounce looks like another that comes prior to a new low. Let’s look at how price behaved in the previous bounces.
29th June – 18th July Ethereum price correction
The zone highlighted above showed a similar bounce that happened between 29th June and 18th July (3 weeks), 2018. The corrective pattern was a Zigzag pattern. It was like a pause before the trend resumed. The zigzag pattern was formed within a channel with a significantly effective mid-line. The chart above shows the price dropped below the mid-line to give an early sign of the end of the corrective pattern. Ethereum price retraced back to the mid-line which resisted the further bullish push. It eventually broke below the swing and dropped massively for a month to $250. Afterward, the price paused again and made another bounce. The chart below shows a similar price behavior.
12th-22nd September correction
The chart above shows the rally after $250 was also corrective. It was a different pattern from the one before it. There was a sideway triangle pattern. Note how price resisted the mid-line twice before breaking downside. Price dropped to $165 after the breakout. The next (current) correction started on 22nd September- less than 2 weeks ago. A zigzag pattern surfaced this time again and the price is not around the channel mid-line. Just as we have seen in the two examples given, the price of Ethereum should drop below the mid-line and retest it. If the mid-line holds and resist the further bullish push, BANG!, we could yet see another bearish breakout to $100. Price breaking out below the swing is very important for confirmation just as seen in the previous examples. That’s is a technical way of looking at Ether to sell it. This will be invalid if price breaks above the channel line instead.
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