Ethereum Testing 23.6% And 38.2% Fibonacci Support Of Wave 4

Ethereum (ETH/USD) is showing strong bullish momentum as mentioned last time. The angle of the uptrend has only accelerated recently (blue arrows). 

Cryptocurrency, Asset, Electronic Payment, Payment

Image Source: Pixabay

However, yesterday’s daily candlestick closed as a Doji which indicates indecision. Is this the first sign of a reversal? Let’s review.

Price Charts and Technical Analysis

(Click on image to enlarge)

The ETH/USD uptrend seems too strong for a reversal to take place now:

  • The gaps between the moving averages (MAs), the angle of the MAs, and the gap between price and the 21 EMAs all indicate a strong uptrend.
  • The Doji daily candlestick indicates indecision and it is more likely to create a potential sideways pullback (grey arrow) or retracement (orange arrow) in the uptrend.
  • The support zone (blue box) is likely a bouncing spot (blue box) for more upside (green arrows).
  • Only a deeper retracement places the bullish outlook on hold (orange) or invalidates it (red circle).

On the 4 hour chart, price action made a bearish pullback to and bounce at the 23.6% Fibonacci retracement level:

  • After completing a 5 wave pattern (blue) in wave 3 (orange), price action is probably building a wave 4 pullback (orange).
  • The 23.6% and 38.2% Fibonacci retracement levels remain key for the potential wave 4 (orange) pattern.
  • A bull flag pattern (grey arrows) could indicate a shallow pullback and uptrend continuation (blue arrow).
  • A deeper pullback (orange arrows) will probably test the Fibonacci support levels.
  • The targets of the uptrend are located at $4750, $5000, $5500.
  • A break below the 50% Fib places the uptrend on hold (yellow button) whereas a deeper retracement invalidates it (red button).

(Click on image to enlarge)


Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. On average around 80% of retail investor accounts loose money when trading with high ...

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