Wave analysis suggests that ETH has either already bottomed or will do so soon. The short-term price trend confirms this possibility, showing a rising low on the chart.
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Has Ethereum completed its correction
The wave analysis of the 6-hour timeframe offers two options for further price movement of the Ethereum token, which turned 8 years old on July 30.
A wave analysis of the 6-hour timeframe offers two options for further price movement of the Ethereum token, which turned 8 years old on July 30.
According to the Elliott Wave Theory, ETH has completed the formation of a five-wave bullish structure (white color) and is now undergoing a correction in the form of an A-B-C structure. Currently, the price seems to be in wave C, which will complete the correction.
But it is not clear yet whether the correction is already completed or will be followed by another low.
According to the bullish scenario, the correction is completed. This is supported by the fact that ETH bounced off the Fibo 0.5 retracement support level at $1825.
So far, ETH has bounced off the Fibo 0.5 retracement support level at $1825.
Fibonacci levels are traditionally considered the most likely springboards for price to stop and reverse after a significant advance in any one direction. Accordingly, they may define the limits of the price move.
The A:C wave ratio as 1:1.61, however, points to a potential low around $1780. This also coincides with the 0.618 Fibonacci retracement support level (white color).
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Source: TradingView
A fall from current levels to $1780 support would mean a price decline of almost 5%. However, if ETH closes below this support area, it could drop to the June lows at $1620, which would represent a 12% drawdown from current levels.
ETH outlook: the rising low is a good sign
The results of technical analysis of the more short-term 30-minute timeframe paint a predominantly bullish picture. The main reason for this is the price rebound from the Fibo 0.618 retracement support level (green icon). It is Fibo 0.618 that often plays the role of a bottom if the price decline was just a correction.
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The rebound formed a long lower wick, which is considered a sign of buying pressure. In addition, a rising low (relative to the July 24 price) has appeared on the chart.
All these are considered signs of a bullish trend and support the possibility that the correction is already complete. In this case, the most likely outlook is for ETH to rise to July highs around $2000 (+7% from current levels).
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Source: TradingView
Despite the bullish outlook, a drop in ETH below the July 30 low of $1848 (red line) would mean that the correction is not yet complete. In this case, the price could fall to the previously highlighted support of $1780.