On Friday the price of Ethereum was sitting around $160.55 at its lowest point from where we have seen an increase of 6.14% measured to the highest point the price has been today which is at $170.41. Since today’s high the price has pulled back slightly and is currently sitting around $167 which is a minor horizontal support level that serves as resistance on the lower range.
On the hourly chart, we can see that the price of Ethereum came up to the 1 Fibonacci level where it encountered resistance which is why a downtrend started as the price got rejected by the resistance found at around $170.4 area. The price is looking for support at the mentioned minor horizontal support level with an early sign that the support is being found there indicated by the wick from the buyer’s side on the last hourly candle.
If the level holds the currently outlined projection would get validated as the price of Ethereum would then continue increasing for another higher high which would be the 5th wave from the five-wave increase from Friday after previously an ABC correction to the downside ended. The increase seen from Friday could end as a three-wave move in which case it would mean that another lower low is ahead and is in conjunction with the previous five-wave decrease the five-wave move to the downside of a higher degree impulse.
This is why the current support point is a significant pivot point which will serve as a validation level for both projections. If the price stars moving to the downside from here it would enter the territory of the 2nd wave of the last structure and would mean that the increase ended as a three-wave structure and is correctional. But if the price manages to finds support here at the vicinity of the 1st wave’s ending point another higher high would be expected which would mean that from Friday we have seen the start of the next higher degree 5th wave to the upside and that the previous Subminuette five-wave decrease was the part of the corrective structure that started on 3rd of April like depicted on the chart above.
As this would be my primary count its validation is now crucial for future projections as we could be seeing the start of a higher degree impulse move to the downside if not true. In either way, since the interaction with the $174.4 horizontal level would mark the end of the first higher degree wave to the upside, the retracement that would follow cannot go below the now interacted horizontal level but if the price does just that the next pivot point would be at around $162 before the projection would be considered invalidated.
Ethereum has significant resistance point to the upside so when the increase ends I would be expecting the start of a higher degree downtrend which could have started if the impulsive movement ended on 3rd of April, but for now a higher high would play out at first before we see a move to the downside with strong momentum.