$ETH formed a powerful bullish candle that signals at least a week of higher prices. The bottom of correction is likely behind, and the odds of a new ATH increased. Let’s explore the hypothesis from various angles.
The High-Wave Doji in May was neither confirmed not rejected by the June candle. As I type, the July’s candle shows the signs of forming a strong bullish candle. We still need to wait for 7 days for this to happen.
– If ETH in July closes below $1707, a prolonged decline would be set.
– A closure above $2908 would likely mean a rally is underway.
– Anything in between, a continued horizontal development.
The weekly candle is a strong Bullish Engulfing. The candle closed above 20 EMA on a higher volume. Positively bullish.
RSI pushed above 50 and other indicators are supporting the bullish odds.
Last week I said that “until a weekly candle closes above $2100 or higher, it is tough to think bullish.” This week it closed $2151 and the odds are definitely bullish.
Odds: Strong Bullish
Six green candles in a row that started with Bullish Engulfing is a very powerful statement. The action is supported by indicators.
From the candles perspective, the rally could continue for another 2-4 days (anything beyond would be a real stretch) before pulling back.
Odds: Strong Bullish
Long Term Chart
From the long term perspective, the Elliott Wave weekly chart remains the same since May 16. There is a possibility that wave IV indeed completed and wave V started.
Judging by the character of the ongoing wave 1 of V, wave V could be exceptionally aggressive and might complete within a month or two. However, to confirm this hypothesis I need to see at least one sizeable pullback, its size and timing.
Alt Count – Red
There is still a possibility of an extended wave IV for another six months or so. With such a strong ongoing rally, I evaluate the odds of such scenario as low.
FORECAST & Events to Watch:
After today’s advance, $ETH is expected to take a pause for 1-2 days and then resume the rally.
1. Target: $2500-2600
Timing: Jul 28-29
2. Pullback: ~$2400, possibly sharp and short (several hours)
3. Target: $2700-2900
Timing: Jul 30-31
If ETH on July 31 closes:
– below $1707, a prolonged decline would be confirmed;
– above $2908 would mean that a rally is underway (highest odds for now);
– Anything in between, a continued horizontal correction (Alt IV in light blue on the long term chart above).
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Call on May 16: