Ethereum ready for another leg up: $500 possible

09 Jul, 2019 | Updated: 09 Jul, 2019
by Lourens Pepler
Price Analysis
Ethereum ready for another leg up: $500 possible

Ethereum has been hovering around $300 for more than 2 weeks now. With ETH now above resistance on price and momentum, this could indicate that Ethereum is ready for its next leg up for a possible move to $500. This is the ETH analysis for 9 July 2019.

Highlights

- ETH above resistance

- RSI trending up

- Elliott Wave structure spotted

- ETH/BTC near a reversal?

Taking a look at the hourly chart, we can see that ETH formed a mini downtrend after it completed the move up to $320. Drawing a downtrend on most of the highs, lays out the resistance levels to watch. We can see now that ETH is trading above this resistance line and is still making new highs, which indicates that ETH has broken out of the downtrend.

ETH/USD chart provided by Tradingview

Now moving over to momentum on RSI, we notice that it is also above the 50 RSI resistance, with it now being close to support. We also notice that an uptrend has taken shape on RSI, since the momentum highs and lows keep growing. 

Although the RSI trend started at 30 on RSI, the actual bullish movement would first appear once RSI finds support above 50, as seen in the example below. This is telling us that this leg up has only just started and that we should expect a nice increase in price as momentum keeps growing.

ETH/USD chart provided by Tradingview

Switching over to a 4hour chart now shows the bigger picture and allows us to look for possible targets for this expansion. If we plot a Fib tool over the first impulse wave, it shows us which possible levels could be reached during the expansion.

Measuring from the high to the low, we can see that ETH is quite bullish, with it first wave only retracing 38%! After 30days of sideways action, ETH then moved onto its next impulse wave, which expanded to the 161% Fib line, before it fell back to the top of wave 1.

ETH/USD chart provided by Tradingview

What we just described above, all fits the criteria for an Elliot Wave. Since we already have wave 1, 2, 3 and 4, we now look for possible expansion levels for the final wave 5. According to the fib line, we could possibly see ETH push up as high as $500. We can see the fib is only at $490, but we believe that an extra push to the psychological level of $500 is possible.

ETH/USD chart provided by Tradingview

Lastly, if we take a look at momentum ETH/BTC, we can see that ETH is currently in oversold conditions, with price making new lows, but RSI making higher lows above 30. This is a clear description of Divergence, which could indicate that ETH/BTC is ready for a reversal. A reversal in ETH/BTC would surely provide extra strength for ETH/USD momentum, to help get it to our target of $500.

ETH/USD chart provided by Tradingview

Do you agree that ETH can make a run for $500, or is BTC too strong and we will see alts bleed further as BTC rises? Let us know what you think in the comments below!

Disclaimer: Keep in mind this not investment or trading advice, just the opinion of our analysts. As always, do your own research, make your own decisions.

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