While price action supports a bearish breakout, wave analysis suggests a bottom is imminent. After that, ETH will resume growth.
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Ethereum breaks support
According to technical analysis of the daily chart, Ethereum is giving mixed signals.
Since June 10, the price of ETH and the rising support line (solid line on the chart) have been rising. As long as the line remained unbroken, the trend was considered bullish.
But on July 14, the token began to decline and six days later broke through the line. This is a sign that the previous upward movement has ended and a new southward movement has begun.
The next closest support is near the long-term upward support line (dotted line) at $1800.
The next closest support is around the long-term ascending support line (dashed line on the chart) at the $1800 level.
Source: TradingView
Daily RSI is bearish, supporting the Ethereum price decline. Currently, this momentum indicator is declining and is below the 50 mark (red icon), indicating a bearish trend.
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ETH forecast: how long the correction can last
Meanwhile, wave analysis of the shorter 6-hour timeframe supports the viability of a bearish breakout. However, it also indicates that the downtrend is about to end.
According to the Elliott Wave Chart, ETH has completed a five-wave bullish price structure (white) and is now in an A-B-C corrective structure. If this is indeed the case, the price is currently in wave C, which will complete the correction.
A ratio of waves A:C as 1:1.61 would give us a low in the neighborhood of $1780. This also coincides with the Fibo 0.618 retracement support level (white). Fibonacci levels are traditionally considered the most likely springboards for stopping and reversing price after a significant advance in any one direction. The Fibo 0.618 often plays the role of the bottom if the price decline was just a correction.
The price of ETH is likely to complete the correction at $1780 and resume the upward movement towards $2000.
In this regard, the ETH price is likely to complete the correction at $1780 and resume the upward movement towards $2000.
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Source: TradingView
Despite the bullish long-term outlook, a drop in ETH below the June 10 low of $1648 would mean that the current decline is not corrective and the trend remains bearish. In that case, the price could drop to $1450.