$ETH is facing the same dilemma as $BTC – which channel to take. After a little pause, it looks ready to continue the rally, but… Let’s evaluate the options from the different angles.
After 3 days of consolidation combo, $ETH looks ready to continue the rally.
However, from the TA perspective, the very quick advance pushed the RSI into the overbought territory and the last three days did help with resetting it lower. This is a concern and there is a chance of a deeper pullback or even a reversal.
The weekly frame does not support a deep retrace at this point. To the contrary, the weekly frame is very bullish, including the PSAR that flipped bullish today.
Until a daily candle closes below $2867, a retrace would be treated as corrective.
Primary count – blue. As marked on the 5hr chart above, I believe that wave (3) is underway. Preliminary target area – $3900-4100.
There is a chance that the rally continues in a lower-sloped channel (blue).
Alternative count – purple. If a pullback develops as a motive wave down, there is a possibility of a much longer correction that I discussed in my Weekly together with the Long Term Forecast.
FORECAST & Events to Watch:
- A daily closure below $2867 would be a major bearish alarm.
- Target for wave (3) – $3900-4100.
- Possible timing – 1-2 weeks, depending on the channel.
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