The price of Ethereum (ETH) has fallen since hitting a new yearly high on July 14. The downward movement caused a breakdown from the ascending support line, confirming the ETH price correction.
While the price action confirms the validity of the breakdown, the number of waves indicates that a bottom will be reached soon. After that, the price of ETH will resume its climb.
Ethereum Drop takes price below support
Technical analysis of the daily time frame of the Ethereum price is giving mixed signals. This is due to price action and technical indicators.
Since June 10, the price of Ethereum has been rising and the ascending support line (solid). The trend was considered up as long as the line was in place.
However, the price of ETH has been declining since July 14 and collapsed from the streak six days later. This is a sign that the previous upward movement has ended, and a new downward movement has now begun.
The next closest support is a long-term ascending (dashed) support line at $1,800.
The daily RSI is bearish, legitimizing the decline in the price of Ethereum. The RSI is an indicator that traders rely on to assess market conditions. When the RSI value is above 50 and showing an upward trend, it indicates a positive situation for bullish investors. On the contrary, a value less than 50 means the opposite.
The RSI is currently declining and is below 50 (red icon), indicating that the trend is down.
ETH Price Prediction: How Long Will the Correction Last?
Technical analysis on the shorter six-hour time frame supports the legitimacy of the breakdown. However, it also indicates that the downward movement will end soon.
According to Elliott wave count, ETH price has completed a five-wave (white) increase and is now engulfing an ABC corrective structure. If so, it is currently in wave C, which will complete the correction. Technical analysts use the Elliott Wave theory to ascertain the direction of a trend by studying long-term recurring price patterns and investor psychology.
Giving A:C waves and a ratio of 1:1.61 will lead to a decline near $1,780. This is also in line with the 0.618 Fibonacci retracement support level (white). According to the Fibonacci retracement levels theory, after a significant price change in one direction, the price is expected to partially return to the previous price level before continuing in the same direction.
Due to this confluence, ETH price is likely to complete its correction at the $1780 level before resuming its upward move towards $2000.
Despite this bullish prediction for the long-term ETH price, a drop below the June 10 low at $1,648 would mean that the decline is not corrective but rather that the trend is still bearish. In this case, ETH price could drop to $1450.
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In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.