Today’s ETH candle signaled a pause. The odds remain strongly bearish after yesterday’s Tower Top. Let’s explore the details.
From the candles perspective, the candle speaks that some horizontal development is ahead. It could take a day or could take five until a decline resumes.
A strong green candle tomorrow that closes above $2322 would cancel this setup.
From the perspective of Elliott Waves, ETH has possibly completed a large wave (B) that started on May 23. Wave (B) was a running flat ABC that ended with a diagonal wave C. As wave C extended only 0.618 of the length of wave A, the next wave down is expected to be rather aggressive. The wave down is should retrace to the origin of the diagonal – $1700-1705. The retrace could happen very fast.
It is very possible that the stop at $1700 marks only the first wave down with more decline after a pause. I made a projection based on this assumption on the chart above. Treat it as such, and I hope to have enough information by the end of week to make adjustments.
On a micro level (chart below), ETH made a very strong and long (over 4 Fibs) wave down off the top of the diagonal (currently marked 1). This behavior is aligned with the expectations I forecasted previously. There is a good chance that, after a retrace, wave 3 would also be extended.
Tomorrow is the weekly cut-off and I hope that the weekly candle would help to clarify the short- and mid-term perspectives.
Follow the blog on Twitter @InvestingAngles or by email subscription. Please Like and Retweet if you find the content useful.
The call on May 16: