$5,000 Ethereum by Summer? (Weekly Forecast)
Ethereum rallied during the week ending March 7th, bouncing off the $1,400 level early in the week before the buyers stepped in later in the week, further buoying over the weekend to over $1,650. This is a bullish candle as ETH clawed back about half of the March selloff’s losses and continues to bounce off support levels as waves of bullish news and developments pour into the space.
(March 7, 2020 8:30 PM EST)
Ethereum’s late week and specifically weekend recovery indicate that HODLers are quietly accumulating during dips whilst no one is paying attention. ETH appears to have found a tentative bottom and is now trading in a rough $1,400 — $2,000 range. If this bullish short-term momentum continues this week then we could see ETH retest resistance near the highs around $2,000. If ETH breaks above $2,000, then it’s off to the races. However, if ETH gets rejected by the $2,000 level or worse, sells off early this week following the weekend rally, then ETH may look to retest the bottom around $1,400 or even $1,300.
There was a flurry of bullish newsflow over the weekend, namely publicly-traded Chinese software company Meitu buying $22 million worth of ETH for the company’s balance sheet as well as the notorious EIP-1559 being officially accepted with a projected release date of July-August along with the long-awaited Berlin update. EIP-1559 will provide fixed gas fees which have gotten expensive and out of control of late due to high network usage, but more importantly it will burn Ethereum “basefees” that were otherwise generated to give to miners. This will effectively reduce Ethereum’s inflationary monetary and possibly even make it slightly deflationary. This is obvious a very bullish macroeconomic fundamental shift for ETH.
As you can see in my Elliott Wave count above, Ethereum appears to be gearing up for a massive rally this spring in confluence with bullish crypto seasonality typically seen in April/May — possibly June. If this late 2020-early 2021 rally was indeed a Wave 1 on the weekly chart, then we’re likely gearing up to start an impulsive Wave 3 rally which is notoriously intense and typically the longest wave. Accordingly, this next bullish wave could conservatively take ETH up to the 2.618 Fibonacci extension level around $4,854. The more optimistic fib extension level, 3.618, would be around $6,500 before a W4 correction.
ETH/BTC recovered strongly over the weekend, rallying to the 50% fib level around 0.034448 before pulling back a bit, closing the week candle near the high. This is bullish as ETH desperately needed to bounce off the 50 Week EMA below just above 0.03 and it did, giving life back to ETH as it rallied against Bitcoin. If ETH can break above 0.035 then it should cement a bottom and higher low, pointing to a price target of 0.04 which is a major inflection point and a historic resistance level over the past year or so.
In many ways, ETH appears to follow BTC inexactly as ETH interestingly mimics BTC’s previous market cycles, following a similar price cycle up and down, and even somewhat tracking the same highs and lows. Now, if that was the case, then ETH is in the early stages of Bitcoin’s 2016–2017 cycle, which, of course, Bitcoin topped around $20K. Now, that’s not to say that ETH has to follow BTC to $20K exactly like BTC did, however, it wouldn’t be unusual for ETH to track a similar trajectory up to $10K or so and maybe even wick higher on a blowoff top, depending on the intensity of the impulsive Wave 5 late in the cycle.
From my perspective, all signs indicate it’s probably wise to buy ETH or earn ETH now before prices continue to ascend in dramatic throughout the rest of 2021 and further. Buying ETH under $2,000 is like buying Bitcoin under $30K; not much higher than the previous ATH, and not likely to last much longer.
Look for immediate support around $1,500, which was supportive recently, and then $1,400, a stronger and previous resistance level.
$2,000. Above that, look for resistance around $2,500 and then $3,000.
Originally published at https://www.publish0x.com.