A substantial countertrend rally should now be underway for Ethereum

As long as last week’s low holds, a wave B (B for Bounce) should be in progress.

I am aware that figure 1 is quite busy with many indicators, letters, numbers, etc. But it does provide a wealth of information that can determine the weight of evidence for what is most likely next. First, the red dotted arrows showing that ETH has risen with less strength, momentum, and money invested. This is called negative divergence, and ultimately the cryptocurrency succumbed to it.

Second, as soon as ETH lost the 20-week simple moving average (SMA) as support, it fell towards and through the 50W SMA in the Ichimoku cloud (the cloud), showing the importance of both for the price of Ethereum. The Cloud provided support, and now ETH has printed its 2n/a week in a row.

This has not happened since the start of the decline from the all-time high (ATH). Furthermore, the RSI5 is also going up and the FSTO is giving a buy signal from the oversold levels. Meanwhile, ETH is trying to break back above the 50-w SMA. So, overall, the weight of evidence supports the idea that a critical low has been reached and a trend change should be underway. After three months of selling, buyers seem to be stepping in. But it is too early to claim victory.

So, as my premium crypto trading members know, any correction always consists of at least three waves: wave-a, wave-b, and wave-c. Sometimes more, but never less. Primary-IV’s now-favorite storyline is no exception. Or as I said last: “From an EWP perspective, this means wave-a of wave-IV is likely, or soon to be, over, and wave-b (b for a bounce!) should then begin.

Exactly how high the B wave will travel cannot be known for certain, but a return of 50% of the previous A wave’s decline is a reasonable “halfway” estimate. Once more price data becomes available, I may narrow the rebound target zone. For now, a countertrend rally to around $4,000 +/- 250 is preferred.

This level is also prior resistance. Please note that B waves are price patterns with potentially multiple twists that are difficult to predict. Why? Because B waves also consist of three waves. So while the bullish target zone, for now, seems like an easy call, getting there can be frustrating on a day-to-day basis. Once wave b is over, I expect wave c to bring Ether price back to around $2000+/-200, hence the next multi-year V primary rally to ideally $9000+/ – 1,000 can start.

At the end of the line : January 20e I’ve found, “The weekly chart suggests that wave a down is over soon and wave b back up ideally to around $4,250 +/- 250 should be underway soon.” With a 37% rally since January 24and weak, that “sooncame quite early, and the countertrend rally should now be underway as long as this low holds. Since ETH has fallen further, the sweet spot target zone is adjusted to $4000 +/- 250.

But this “dead cat bounce” is likely to be a somewhat overlapping affair, so I will need to carefully track and monitor price developments for my crypto trading premium members over the next few weeks to anticipate and mitigate as many surprises as possible. Either way, the weekly chart setup is now as good as it gets for the Bulls to usher in a decent rally.

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