ETH/USD Strong Bullish Momentum After ABC Correction In Wave 4

The Ethereum (ETH/USD) cryptocurrency made a bearish ABC correction (grey) – as we expected in our previous analysis. This occurred after completing a strong surge higher within a wave 3 (pink).

Yesterday Bitcoin, the cryptocurrency market in general, and especially ETH/USD made a strong impulsive move up. The news that Visa is planning to allow payment settlements using cryptocurrency, which will use the ethereum blockchain. 

Price Charts and Technical Analysis

(Click on image to enlarge)

The ETH/USD daily chart is showing that the expected ABC pattern (grey) did indeed play out after price action made a bullish bounce at the 38.2% Fibonacci retracement level. Let’s review what traders might expect next:

  • The resistance trend line (orange) is critical for the next step. A bullish breakout (green arrows) indicates an immediate uptrend, the end of wave 4 (pink) and the start of wave 5 (pink).
  • A bearish breakout (orange arrows) below support (green line) indicates a deeper or longer retracement. In that case, an ABCDE triangle chart pattern is the most likely chart pattern. Later on, we expect wave E to finish and then wave 5 (pink) to start.
  • The next targets are located at $2,000, $2,150, $2,500, and then $2700.

On the 4 hour chart, price action has been testing the 144-233 long-term moving average for the first time since December 2020. Let’s analyse this chart:

  • A bearish ABC pattern (grey) took place after a strong wave 3 (pink).
  • The long-term MAs have stopped price from falling down lower, which created a shallow and sideways correction in wave 4 (pink).
  • The recent and current surge up (light blue arrows) is very strong. This indicates a wave 3, which means that a bullish breakout (green arrows) has the best probability. This is probably an ongoing wave 3 (orange).
  • Only very deep and unlikely retracements (yellow/red circles) place the uptrend in danger.

(Click on image to enlarge)

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Disclaimer: The opinions in this article are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit ...

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