ETHUSD: Elliott Wave and Technical Analysis – Video and Charts – November 15, 2021
Summary: Both the main and alternate Elliott wave counts expect the low of June 22, 2021, to not be breached.
The main Elliott wave count expects the next very strong bull run has begun.
The alternate Elliott wave count expects a huge triangle to continue sideways for a few months before the next bull run begins.
The data used for this analysis comes from Yahoo Finance BTC-USD.
Monthly and Weekly charts are on a semi-log scale. The close up daily chart is on an arithmetic scale.
MAIN ELLIOTT WAVE COUNT
The monthly chart looks at the entire price history of Ethereum. The Elliott wave count begins at the low of October 2015.
From October 2015 to December 2017 this upwards wave subdivides perfectly as an Elliott wave impulse, labelled cycle wave I. The impulse lasted just over two years, which is within the expected duration for a cycle degree wave, so confidence that this labelling is correct may be had.
Within cycle wave I, note that wave lengths noted on the chart are not Fibonacci ratios but guides to expected behaviour for Ethereum. Prior Ethereum price history exhibits very long third waves and fifth waves which are longer than third waves.
Primary wave 4 may not move into primary wave 1 price territory below 361.3987.
Cycle wave III may only subdivide as an impulse. It must move far enough above the end of cycle wave I to allow room for cycle wave IV to unfold and remain above cycle wave I price territory.
This is now the main wave count as upwards movement since this analysis was last published suggests the prior pullback labelled intermediate wave (2) should be over. This looks too brief to be considered as primary degree.
It is possible that primary wave 3 is not over. The last high may have been only intermediate wave (1) within primary wave 3. Primary wave 3 may be unfolding as a very long extension.
Primary wave 3 may only subdivide as an impulse. Within primary wave 3: Intermediate waves (1) and (2) may be complete and intermediate wave (3) may only subdivide as an impulse. Minor waves 1 and 2 within intermediate wave (3) may be complete. Within minor wave 3, no second wave correction may move beyond its start below 2,767.4077.
This is a very bullish wave count. At all degrees, third waves may only subdivide as impulses.
This wave count now expects a third wave up at seven degrees is in its early stages.
Subminuette wave ii may not move beyond the start of subminuette wave i below 4,160.967.
Within the impulse of cycle wave III: Primary waves 1, 2 and 3 may be complete and primary wave 4 may continue sideways as a large triangle for a few more months.
Primary wave 2 was a deep 0.95 zigzag, lasting 37 weeks. If primary wave 4 subdivides as a shallow triangle, then it would exhibit alternation. So far primary wave 4 has lasted 26 weeks; it may be longer lasting than primary wave 2 as triangles are usually longer lasting than zigzags. At this time, primary wave 4 may be less than half way through.
Primary wave 4 may be a running contracting or running barrier triangle. Intermediate wave (B) within primary wave 4 is now a 1.19 length to intermediate wave (A). This is within a normal range for running triangles. This wave count remains valid.
Like almost every other cryptocurrency I have analysed, Ethereum can sustain a strong bullish trend for a reasonable time while price travels a considerable distance. RSI can reach deeply overbought and ADX can reach above 50 exhibiting a very extreme trend.
At the last major high, RSI reached deeply overbought and then exhibited bearish divergence, and ADX reached very extreme. The pullback may have relieved these extreme conditions and set up the next bull run.
The bullish signal from On Balance Volume favours the main Elliott wave count.
The correlation co-efficient is provided at the bottom of this chart in anticipation of readers pointing out that the main wave count for Ethereum differs from the main wave count for Bitcoin. These two markets do not always exhibit a strong positive correlation, despite assumptions that they should. It must be accepted that the current positive correlation could break down at any time, so from an Elliott wave perspective they must be approached separately.
At this time frame, there is no clear trend and the short-term volume profile is bearish. This supports the alternate Elliott wave count.
However, at the high, there is no bearish candlestick reversal pattern, no bearish divergence between price and RSI, and RSI did not reach extreme. Conditions for a major trend change and a large downwards swing do not appear to be in place; this supports the main Elliott wave count.
Published @ 07:21 p.m. ET.
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