The Ethereum (ETH) price has been falling since early April, when it temporarily deviated above an important long-term horizontal resistance
While this may lead to further declines in ETH, both bullish and bearish wave analyses are still relevant. Thus, the direction of the long-term trend of ETH is still unclear.
Ethereum price failed to consolidate gains
ETH is a native Ethereum blockchain token co-founded by cryptoindustry heavyweight Vitalik Buterin.
In the fall of 2022, the entire project migrated from the energy-consuming consensus Proof-of-Work (PoW) mechanism to the algorithm Proof-of-Stake (PoS).
Next, in April 2023, the network successfully passed the update Shapella. The upgrade implemented EIP-4895, which allowed investors to exit Beacon Chain placed on stacking ETH.
In the course of the upgrade, the offer EIP-4895 was implemented, which allowed investors to withdraw from Beacon Chain placed on stacking ETH.
As the results of technical analysis of the weekly timeframe show, the prospects for the coin lean toward bearish, although a number of signals are mixed.
In early April, the price of Ethereum reached a one-year high of $2151, seemingly surpassing the $1950 resistance area.
However, after a significant decline the following week, the price fell below that area and confirmed it as resistance (red icon).
So the previous bullish breakout is now considered invalid. This movement is considered bearish, because the buyers were unable to consolidate the growth. The nearest support area is at $1600.
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The Relative Strength Index (RSI), however, remains bullish as it holds above the 50.
It is a momentum indicator indicating overbought/oversold and bullish/bearish market sentiment, depending on whether it is above or below the 50 mark.
In the case of ETH, the index indicates a bullish trend.
ETH forecast: what wave analysis says
Wave analysis, meanwhile, offers two different scenarios. The first of them is bearish and states that the price has completed the formation of a corrective structure A-B-C.
If so, a significant downtrend would follow which would send the price to new lows.
In this potential scenario, the A:C waves have a ratio of exactly 1:1, which is the most common ratio in such structures. If this analysis is correct, ETH will eventually fall below $1000.
The bullish scenario suggests that the rise in price represents a 1-2/1-2 bullish wave structure. This means that ETH exchange rate is now in sub-wave two (white) of wave three (black).
This is an extremely bullish forecast, in which the bullish angle will intensify as soon as the price triggers a third sub-wave.
In order for this analysis to be correct, ETH must bounce from the $1600 support area and begin a sharp upward move above $2000.
Since the second 1-2 structure should have a steeper slope than the first one, a bearish break below the slope line of the first structure (black) would cancel this scenario.
In order for this analysis to be correct, ETH would need to bounce from the support area of $1600 and start a sharp upside movement above $2000.
So the future trend of ETH will be determined by whether the price breaks below $1600 or rises above $1950.
In the first case, a decline to at least $1,000 is expected.. However, in the second case Ethereum may strengthen to $2500.