Ethereum (ETH) price has managed to stay above the $1,270 horizontal support area. Breaking this can cause prices to drop too low.
ETH price has been declining inside a descending parallel channel since reaching a high of $2,030 on August 14th. Such channels usually have corrective movements, which means that an eventual breakout would be expected from it. The price of Ethereum fell to $1,190 before the rally on 13 October.
The boom was important for several reasons. First, it formed a long lower wick (green icon), which is considered a sign of buying pressure.
Secondly, it validated the $1,270 horizontal area as support. This area earlier acted as resistance in July and has now turned into support. Finally, it shifted the price of ETH to the upper part of the channel.
Notably, the daily RSI is still following its descending resistance line (green) and is well below 50. A breakout from both is needed for the trend to be considered bullish.
Ethereum Price Prediction: Wave Count Support Breakout
While the price forecast from the daily time frame has mixed signals, the weekly time frame is bullish.
The most likely wave count shows that the fifth and final wave of Ethereum price bullish impulse (red) has begun. If true, the upcoming upward movement will lead to a new all-time high.
There are two main factors that support the validity of the calculation. ETH price has completed a 4th wave pullback, and the sub-waves A:C has an exact 1:1 ratio (white).
However, similar to the daily time frame, the weekly RSI has not broken out of its bearish divergence trend line (green) and remains below 50. A breakout from both is needed to confirm the trend.
A drop below the yearly low of $881.56 suggests that the price action is rather bearish.
ETH price could beat BTC
The ETH/BTC pair also provides a bullish outlook, suggesting that the price of Ethereum is expected to outperform Bitcoin (BTC).
While the price of ETH has been declining since the five-wave upward move on September 7, it has temporarily halted its decline. Ethereum price turned upside down at the confluence of both the Fibonacci and horizontal support levels at 0.067. Moreover, the daily RSI has generated a significant amount of bullish divergence.
These signals indicate that an upward move is expected. If one occurs, the main resistance zone will be between 0.075-₿0.078. The area is formed by the 0.5-0.618 Fibonacci Retracement resistance levels.
A price below the 0.065 low would invalidate the bullish ETH price prediction.
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