Ethereum is retreating from $188 2019 high. How deep will it go after a reversal pattern completing at the top?
April 25, 2019. AtoZ Markets - It's been a good year for the cryptocurrency market as most cryptos are recording significant gains. Bitcoin hit 5600 in a 78% rally from December low while Litecoin hit almost $100 in an impressive 348% gain in the same period. Ethereum has also hit 125% gain to hit $188. The talk of market recovery into the next bullish phase is permeating the crypto industry.
Bitcoin gains 78%, Ethereum 125% and Litecoin 348%
If recovery was going to happen, it would come steadily with trendy and corrective runs in-between larger trends. The first phase toward the next bullish phase seems to be completed- a motive wave from the bottom. Bitcoin is completing an impulse wave from 3100 bottom. Litecoin has a similar price development from $22. Ripple, on the other hand, is painting a corrective picture signaling further dips. Ethereum price pattern looks like a leading diagonal after making good runs from $82 in December to $188 in April. 80% of the top ten ranked cryptocurrencies on Coinmarketcap are painting similar trendy patterns which means two things - a complete bullish recovery taking over from the bearish phase or a larger bullish correction before another low.
Despite the talk of recovery, some analysts still believe there are issues yet unsolved. Mass adoption and institutionalization of the industry are important factors that would attract big guns to invest in the industry if resolved. I think that will happen albeit gradual. More events in the nearest future will unfold that would determine the direction of the market and change mass opinions. However, while waiting for all these, technical analysis can help weigh in the current psychology of traders revealed with price patterns that are repetitive on the charts. They could help give clues for short and medium-term price directions.
Ethereum technical analysis and important price levels
A leading diagonal from 82 seems to have completed at 188. A 3-wave corrective dip follows and is expected to continue to 134 or 103 if very deep. There are two scenarios. Either Ethereum price makes a long-term bullish impulse wave toward 500 or a 3-wave correction at 250. The former will lead to a complete recovery and price making a new all-time high far above 1,400. If the latter plays out, the price would rally to 250 after the current dip ends, before making a new low. From the short-term outlook, a dip toward 130 is now expected. The chart below shows another reversal pattern forming around 160-188 zone.
The head and shoulder pattern signals a short-term dip especially if the price drops below the 160 neckline. If the price moves as expected, next bearish targets are 130 and 103 before the recovery or large bullish correction resumes far above 200.