ETHUSD: Ethereum Price History and Elliott Wave Structure
Diupdate
The Ethereum network went live in July 2015, six years ago this week. By September 7, its price was reported at USD 1.24, and on June 17, 2016 it marked its first noteworthy peak at $22. This was the first wave of a five-wave sequence that culminated on January 13, 2018 in a major peak just pennies short of USD 1420.
This $1420 peak and the all-time-high (ATH) of circa $4383 in May 2021 dominate the entire chart of Ethereum to date. They may be considered waves one and three, respectively, of Primary Degree of a five-wave sequence that is expected to be complete by the end of 2021 or early 2022 to form the first wave of Cycle Degree of the second largest crypto market.
Assigning Elliott Wave Primary Degree wave 1 and wave 3 to the existing peaks of the chart provides convenient labeling of waves down to Submicro Degree and even Minuscule Degree on one-minute-bar charts. It also provides a multi-decade period of growth in Cycle Degree. The Primary Degree waves are indicated in the chart by encircled green numerals as the largest waves, and are written in text as ((1)) through ((5)).
The correction in Primary ((2)) from the peak of ((1)) took essentially the remainder of the entire year of 2018, until in January 2019 a first wave in Minor Degree (simple black numerals) developed that by mid-year had formed a first wave in Intermediate Degree, whose five-wave completion yielded the ATH in May 2021.
On May 19, 2021, crypto markets crashed sharply, following its leader Bitcoin. In a matter of a few days, Ethereum collapsed from about $4384 to about $1728, according to the shown data source (Coinbase), a loss of about 60% of market cap. Following the initial sharp drop, a mostly sideways corrective trading period developed for exactly two months, that overall has the typical shape of a descending triangle with a flat, almost horizontal bottom trend line. The deviation from being perfectly horizontal is merely a matter of a few dollars. The entire correction was supported by the 23.6% Fibonacci retracement of Primary wave ((3)), at about $1710, in confluence with the price range of the prior fourth-wave correction in lesser degree (Intermediate) of February 2021, designated in the chart ((iv)). This is also a typical guide line in Elliott Wave practice. The shape of this correction, as a triangle, which is considered a complex structure, is also supported by the Elliott guideline of alternation. It can be seen that wave ((1)) corrected in ((2)) as a simple A-B-C sequence that can be described as a zig-zag, consisting of two five-wave legs, (A) and (C), and the enjoining three-wave (B).
Internally, the descending triangle is also well described by the Elliott Wave triangle correction, a five-wave sequence of corrective waves (three-wave structures), designated in Intermediate Degree as (A) through (E) in red color. The end of wave (E) also constitutes the end of wave ((4)) in Primary Degree, and the end of this correction. After completion of wave (E), Ethereum prices swiftly spiked during the weekend of July 24-25 in an extended sequence of waves to the $2400 territory, that was also fueled by speculation that Amazon is developing a cryptocurrency strategy.
The only defect of the assignment of a contracting triangle is that Elliott prescribed that wave (C) should not exceed the end of wave (A), but in this instance, it was only by a few dollars.
Following the completion of the triangle and Primary wave ((4)), Ethereum is set to proceed in wave ((3)) to new highs in the coming months. The price target for this may be tentatively projected with Fibonacci guidelines, and is shown in the chart, when dragging the chart just slightly left. Estimates range from about $5800 for the 1.618 extension, to over $12000 for the 2.618 extension.
Fibonacci analysis also provides a rational basis for the assignment of other waves in this chart. Especially, the current ATH of $4384 is well supported by a confluence of Fibonacci ratios of 4227 by 1.272 of ((1)), 2.618 (3737) of (1), and the 5.0 extension ($4266) of wave (1) from (3), all as shown in the chart.
This $1420 peak and the all-time-high (ATH) of circa $4383 in May 2021 dominate the entire chart of Ethereum to date. They may be considered waves one and three, respectively, of Primary Degree of a five-wave sequence that is expected to be complete by the end of 2021 or early 2022 to form the first wave of Cycle Degree of the second largest crypto market.
Assigning Elliott Wave Primary Degree wave 1 and wave 3 to the existing peaks of the chart provides convenient labeling of waves down to Submicro Degree and even Minuscule Degree on one-minute-bar charts. It also provides a multi-decade period of growth in Cycle Degree. The Primary Degree waves are indicated in the chart by encircled green numerals as the largest waves, and are written in text as ((1)) through ((5)).
The correction in Primary ((2)) from the peak of ((1)) took essentially the remainder of the entire year of 2018, until in January 2019 a first wave in Minor Degree (simple black numerals) developed that by mid-year had formed a first wave in Intermediate Degree, whose five-wave completion yielded the ATH in May 2021.
On May 19, 2021, crypto markets crashed sharply, following its leader Bitcoin. In a matter of a few days, Ethereum collapsed from about $4384 to about $1728, according to the shown data source (Coinbase), a loss of about 60% of market cap. Following the initial sharp drop, a mostly sideways corrective trading period developed for exactly two months, that overall has the typical shape of a descending triangle with a flat, almost horizontal bottom trend line. The deviation from being perfectly horizontal is merely a matter of a few dollars. The entire correction was supported by the 23.6% Fibonacci retracement of Primary wave ((3)), at about $1710, in confluence with the price range of the prior fourth-wave correction in lesser degree (Intermediate) of February 2021, designated in the chart ((iv)). This is also a typical guide line in Elliott Wave practice. The shape of this correction, as a triangle, which is considered a complex structure, is also supported by the Elliott guideline of alternation. It can be seen that wave ((1)) corrected in ((2)) as a simple A-B-C sequence that can be described as a zig-zag, consisting of two five-wave legs, (A) and (C), and the enjoining three-wave (B).
Internally, the descending triangle is also well described by the Elliott Wave triangle correction, a five-wave sequence of corrective waves (three-wave structures), designated in Intermediate Degree as (A) through (E) in red color. The end of wave (E) also constitutes the end of wave ((4)) in Primary Degree, and the end of this correction. After completion of wave (E), Ethereum prices swiftly spiked during the weekend of July 24-25 in an extended sequence of waves to the $2400 territory, that was also fueled by speculation that Amazon is developing a cryptocurrency strategy.
The only defect of the assignment of a contracting triangle is that Elliott prescribed that wave (C) should not exceed the end of wave (A), but in this instance, it was only by a few dollars.
Following the completion of the triangle and Primary wave ((4)), Ethereum is set to proceed in wave ((3)) to new highs in the coming months. The price target for this may be tentatively projected with Fibonacci guidelines, and is shown in the chart, when dragging the chart just slightly left. Estimates range from about $5800 for the 1.618 extension, to over $12000 for the 2.618 extension.
Fibonacci analysis also provides a rational basis for the assignment of other waves in this chart. Especially, the current ATH of $4384 is well supported by a confluence of Fibonacci ratios of 4227 by 1.272 of ((1)), 2.618 (3737) of (1), and the 5.0 extension ($4266) of wave (1) from (3), all as shown in the chart.
Catatan
The chart came out online a little more congested with wave labels than on my large monitor, despite omitting some labels of waves that are not very important. Hope it is clear enough.Catatan
Here is a the first part of the chart more expanded for clarity.Catatan
And the most recent part of the chart:Catatan
The above description contains a typographical error. The second to the last paragraph should read as follows, it should be wave ((5)) that is unfolding now, not wave ((3)).Following the completion of the triangle and Primary wave ((4)), Ethereum is set to proceed in wave ((5)) to new highs in the coming months.
Catatan
Since the end of the descending triangle correction, ETH has put in a nice bullish impulse resulting in a top 2438. The retracement of this was a fairly shallow three-wave drop. As a three-wave structure, this could have been a complete A-B-C pullback, but since it did not advance very far and was fairly quick in just a few hours, I immediately suspected that the bullish sentiment might produce a larger horizontal structure. I believe this to be correct. The ensuing structures were not easy to decipher, but I believe this is the correct assignment that make a lot of sense and has structural integrity. Therefore, I am labeling this entire leg up from the correction area as wave 1 of a new up-trend. Wave 2 is in the process of completion at this very time.Wave 2 is identified as flat, with 3-3-5 structure, resulting an orthodox top. Wave B extended beyond the end of the impulse in a new high of about 2450.
Upon completion of wave C of the Flat, we should continuation of the upward trend.
Catatan
Grammar correction: We should expect continuation of the upward trend.Seems I may have spoken just in time, as the next steps up seem in progress.
I also wanted to comment on the logistics of the orthodox top. The last 1-2-3-4-5 structure that led to top of wave B was not primarily driven by Bitcoin. Sure, it had a similar relative structure, but BTC did not advance to a new high at all. ETH produced something like an 8% advance in the last day or so, while BTC achieved almost no real gain. The consolidation of BTC at this local top has taken longer, A real uptrend will only start when both are in sync.
Catatan
I should have labeled the previous high, i.e. end of wave 5, or (1), as the orthodox top, not the actual top formed by wave B.Here is the structure of the actual top (B) and the conclusion of wave (2), as labeled in the chart.
We see that wave four, iv, of wave C has developed into a triangle structure, a-b-c-d-e. Its end seems very close, imminent actually, as wave E is near completion, commencing the descend in wave five, v to complete C of (2).
Catatan
To illustrate the relationship of ETH to BTC in this region, here is the comparison.We see that both, ETH and BTC, formed orthodox tops and flat ABC structure, but the actual tops at wave B are in different places.
Catatan
When both coins complete their respective final wave five, we should expect a strong uptrend to resume.Historically, ETH has taken two to six weeks after a fourth wave correction to return to the previous high. About a month ago I estimated that ETH should be at the old top by mid-August. I think this is still possible, perhaps second half of August.
Catatan
The structure in wave iv of C actually seems to be developing into something slightly more complex, taking the sideways trading a step further. It's probably driven by the fact that BTC isn't finished.It may be noticed that the first wave into the triangle was actually a five-wave structure, while a triangle requires a three-wave lead-in. At the end, the horizontal action so far has been continuing.
I think a better assignment is that the wave iv correction is an A-B-C structure with a triangle in wave B. Therefore a C-wave is needed (up), still followed by wave five (down) to C.
Catatan
Here is the wave structure for that.Catatan
I have the feeling that I may have been way to optimistic to get a lower entry point into the wave 3 uptrend. Since I posted the last update, the wave shapes have perfectly played out in the market, but much smaller in size. The bullish pressure wants the market to go north.Catatan
But it is quite possible that the retracement in wave ((c)), the last leg iv is just a lot deeper. It was just a little over 42% previously. So, caution is in order, this can reverse very quickly.Catatan
Indeed, we see to be off to the races... ETH has swiftly recaptured 2400, and BTC is well beyond 40,000 again.My previous chart update was only lacking in the size of the remaining waves.
Catatan
The overhead resistance zone between 2600 and 2900 is indicated in this last chart by relevant price levels of previous highs from the early days of the consolidation in wave larger wave 4.Catatan
The advance took Ethereum to 2467 so far, before stalling. The reason for stalling probably was that BTC penetrated its own resistance zone with a spike, but was rejected for now.This provides for some consolidation, before continuing the trend. ETHUSD printed a nice looking ABC-zigzag past the 38.2% Fib level. A clean three-wave zigzag indicates either that the consolidation is complete, or that a triangle is possible. But given the price structure in the last few minutes, the latter seems unlikely, as the B-wave has already been exceeded in price. At least it could be a barrier triangle. I am looking for continuation.
Catatan
Bitcoin has been grinding its way further into the resistance zone, and has even surpassed its initial spike. It seems just a matter of time until the entire zone falls and becomes support. ETH has further to go.Catatan
And the journey north continues.From the last update, ETH did in fact put in another complex consolidation in another 3-3-5 flat, forming another orthodox top. Apparently the bullish pressure is so strong that consolidations now happen more or less upward.
Catatan
This time BTC exercised pretty much the same routine and finished at exactly the same time in the same structure.Catatan
Overnight the wave assignments in the last chart got invalidated by the waves exiting from what was labeled as a diagonal.The new assignment is here. It extends the consolidation just a little bit. But ahead of the even 2500 dollar mark, ETH encounters considerable resistance here, it is clear. BTC is also still grinding in its resistance zone. So we may expect more sideway action with short advances for a while. At some point, I also have to reevaluate the entire assignment of the whole leg from to see whether extension should be labeled differently.
Catatan
I have the hunch that this sideway consolidation is going to form a triangle when its done. The trend lines for such a structure are already in place, with A, B, C, and D formed. We really only need a drop to put E in place and then the uptrend can try to resume.Catatan
These complex consolidation can go on and on and on.... until they pop without notice.Catatan
POP.But ETH didn't quite make 2500, BTC is also still fighting for 42000.
Catatan
There we go on second attempt. How is the air up here?Catatan
We saw a night of consolidation from yesterday's advances across 2500 and well into 2600 territory. For the EWT enthusiast, here is the wave structure as I see it right now.The triangle correction that we discussed yesterday developed further and produced interesting internal extension of its three-wave components. Finally it popped and produced four waves of five upward, with the fifth wave apparently in progress.
Catatan
Compare the dynamics of ETH with that of Bitcoin, which pretty traded pretty much horizontally in its resistance zone the entire time, did however print a new high around 42600.ETH is just entering its own zone of historically important markers, in the region 2600 to 2900. Perhaps wave five is going to penetrate that more substantially, and we see a few days of sideway grinding here too.
Catatan
Here the orange trace is that of Bitcoin.Catatan
The market has no trouble finding ways to continue consolidations...It seems clear that this is developing an expanding diagonal in wave C of ABC, that should soon break to the upside, when wave 5 is finished. Wave 5 may or may not drop down to the trendline.
Catatan
A warning.... The possibility also exists that I miscounted the major waves up, and this last run was already wave 5, which would mean that we could see a major pullback at this point. Have to keep an eye on the overall count all the time.Catatan
The resistance zone may have exhausted the thrust and some larger correction might be needed.Catatan
It seems to me that BTCUSD has formed, and quite possibly completed, a quite large expanding diagonal that is pointing upward. Not good news for a continued uptrend right now. We have to see how it develops. No matter what ETH wants, it will follow BTC in some manner.Catatan
I am changing my wave assignment based on market action... Turns out that the wave down that I labeled as wave five, v, of the diagonal was only the A-leg of the five. Each leg of a diagonal is a three-wave structure (or a triangle), and the market now revealed the true count with bigger waves.Catatan
The simultaneous drop in BTC was halted by BTC's lower trend line of the thrust channel from the end of the larger wave 4 correction (about 30k). I think that trend line should hold, we'll see.Catatan
The hourly BTC chart printed a solid dragonfly doji of about $600 into the lower channel trend line. If that's not reversal to upside, I don't know... The trend is your friend. For how long, we'll see.ETH also bounced off the lower trend line of the diagonal, pretty strongly.
Catatan
I am expecting a major burst north for both ETH and BTC. BTC is right on its bull trend line, an ideal entry point for a major move into the upper forties.Catatan
On the hourly chart BTC seems to have quietly formed a three-day expanding triangle that has just completed the E-wave touch to the base line, and in addition has bounced off the long-term structural (bull) trend line. It seems ready to unleash to the upper channel line, which right now is at about 49k.Catatan
ETHUSD has just broken the extension of the upper trend line of the diagonal it just exited. On first thought, this looks like a third wave that just paused at the 100% length of wave 1, at $2600, posed to run higher after the Submicro (or so) wave corrections are completed.Catatan
Catatan
Let's look for a moment at the overall Ethereum market of 2021, that is the area around the all-time-high.I also marked the long-term trend line (in dashed purple) from the bottom of the current bull trend. This line is the trend line of the entire wave (3) and (4) components since the end of the second wave (2). It clearly shows that nobody should expect any further artifacts of this summer's consolidation. There is no bear market, never was. It was a market correction. The bull trend remains and in the second half of this new month of August, we will see the old ATH broken, I believe.
Catatan
Well, well, well... Looks like they are off to new highs.ETH has printed a nice 1-2 out of the diagonal, and already achieved the 1.618 extension, precisely, in wave 3 at a new high of 2666.
BTC isn't quite as far along toward a new high, but is looking.
Catatan
I had this advance labeled as the fifth wave, but now I have to consider the possibility that the last completed waves 3 and 4 were in fact lower degree extension waves 1 and 2 in higher degree wave 3.I don't see how I can test this right now, but we have to keep it in mind for the examination of later consolidations.
Catatan
Perhaps the indication that this might be the case rests in the fact that the previous third wave was actually rather short. So, we have a 1-2, 1-2 sequence in short order for a loooong ride in the major wave 3.Catatan
Looking at the ETHBTC chart, it seems that the trend of BTC outperforming ETH is about or already has reversed. Today's action in ETHBTC is perhaps a preview of that.Catatan
I think this structure in Bitcoin has been the driver for Ethereum in the past week. I have not reworked the details of the internal structure, so it is a bit messy and raw, but this cleans up the chart quite a bit, and most importantly it provides a compact explanation for the mostly sideway action in BTC through the resistance zone in the past week, and provides a great and wide basis for a new trend channel that can take the issue to new highs in coming weeks.Catatan
Looking again at the ETHBTC chart (Ethereum paid for in Bitcoin), it is pretty clear that it too has completed the fourth wave consolidation since May. The consolidation has the same structure as the ETHUSD chart, namely a triangle correction. It has been up sharply in the last few days, and even today we see that ETHUSD is recovering from yesterdays pullback much quicker, taking a swing at the 2700 level once again.Catatan
Despite generally increasing prices, none of this seems terribly bullish right now. I don't see clear five-wave impulses.Catatan
Assigning wave labels to the most recent ETHUSD structures has been challenging as the market progressed through the beginning of August. But once a while we get a glimpse by recognizing completed structures, as happened overnight when finally a full wave cycle of 1-2-3-4-5-A-B-C revealed itself, after a textbook retracement right into the 61.8% to 65% zone. I suspect this is a Minuette degree wave, labeled (i) through (v), and (a), (b), (c).I think this gives us the right to also assign a 1-2 sequence in Minute degree, which is good news, because we should expect a third wave up. It may also confirm my assignment of the prior moves going back to the large spike and equally impressive retracement on July 26. I have drawn a pitchfork onto that spike and this shows an orderly market within certain Fibonacci levels. The pullback of last night down to 2444 falls exactly onto the 150% expansion of that pitchfork. WOW.
This really confirms the Ethereum trading channel, and we should expect further development within this channel to the upside. This being the bottom of the channel, this would present a convenient entry point to add to our ETHUSD holdings.
Catatan
However, one impulse in this wave sequence has me doubt this assignment. It is highlighted in this chart. It should be a clean 5-wave but it isn't. A three-wave assignment seems more appropriate. The corresponding labeling is shown in large encircled numbers, and does not appear to support the bullish sentiment in the larger context. We have to see how this plays out when the structures are more complete.Catatan
I believe that a dramatic move up in BTC and ETH is about to launch. BTC has formed a base (1-2 sequence) to propel the market to a new ATH, and beyond. The oscillations at the end of wave 2 are very small now, and should cause a breakout any time.Catatan
But I don't have an exact wave count yet in the small degrees of this corrective period. So I can't definitively exclude a break DOWN.Catatan
I believe BTC has formed an A-B-C flat on top of the initial impulse out of the correction in July.Here is raw working chart with many wrong wave counts in the details, but I think it reflects my grand idea.
Catatan
The light-orange zone is the resistance zone from historical price tops of the correction, this needs to be pierced decisively right away, as the market has tested it already. It will serve as support thereafter. Ethereum should easily follow Bitcoin through its own zone which it also has tested recently on its journey to 2700.Catatan
Here is the current Ethereum setup as simple as possible:Catatan
So, the bottom funk is clearing up and ETH has put in several green candles on the hour chart this morning. BTC has decided it is enough and given us free run. I would not be surprised to see a new local high on ETH by the end of the day. That would mean 2700.Catatan
Longest green hour candle since July 25, just before 2600.Catatan
At some point I will update the price history in a new post, but in the meantime, I'll continue more recent updates to this thread:
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