How long will the Ethereum (ETH) price correction last?
Date: 2023-07-11 Author: Karina Ziganova Categories: BLOCKCHAIN, IN WORLD
The price of Ethereum (ETH) has been falling since July 3. Probably, the asset is completing a short-term correction in response to the growth that began on June 15.
On the day the maximum was reached, the price of ETH formed a bearish candle, which confirms that the local top has been reached. This marked the beginning of the current correction, which could potentially continue for another two weeks.
Ethereum failed to break above an important resistance level
Technical analysis of the daily timeframe gives ambiguous readings. The price of ETH bounced off the descending resistance line on June 21, peaking at $1976 on July 3, but was then pushed back to the $1940 area. This is both a horizontal resistance area and the 0.618 Fibonacci level.
The principle underlying the Fibonacci retracement levels assumes that after a significant movement of the price in one direction, it partially retreats to the previous price level before continuing to move in the previous direction. Thus, the reaction to the 0.618 level is crucial to determine the direction of the future trend.
On July 6, Ethereum formed a bearish candle (it is marked with a red icon on the chart), accelerating the pace of decline. This confirms the likelihood that the price is in a short-term downtrend.
The daily Relative Strength Index (RSI) is currently declining, but still holding above 50, which means that the direction of further movement has not yet been determined.
Wave analysis gives contradictory readings
The wave chart gives a bullish long-term forecast for the price of Ethereum, but at the same time indicates the possibility of a short-term correction. It assumes that on June 15, the asset began a five-wave upward movement (it is marked in white on the chart), which led to a high on July 3. Since the movement is complete, the most likely short-term outlook is the corrective structure A-B-C.
Due to the duration of the previous upward movement, the correction may last until July 22. In this case, the area of completion of the correction will be between the levels of $1760 and $1800, formed by the support levels of 0.5-0.618 Fibonacci.
A move above the high of the fifth wave at $1975 will mean that the correction is complete. In this case, the price of Ethereum could rise to the next resistance at $2300.
