ETH Simple ABC Correction in Play. Targets in $500-$800 RANGE!
Updated
In this chart I have depicted a simple ABC correction that is playing out on ETH. Wave C is currently playing out and will be composed of 5 subwaves, similar to Wave A. We are currently just beginning Wave 3 of 5 for C if my count is correct. Initial targets are posted as horizontal lines and are based on fib retracement levels.
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Target 1: $820.20 (Wave C length equaling 61.8% of Wave A)Target 2: $575.01 (Wave C length equaling 100% of Wave A)
Also note we have a rising wedge on the hourly RSI which should breakdown in a few hours and lead to the next leg down in price. From there we should see a relatively quick drop to our targets.
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WORST CASE SCENARIO TARGET: $420, this would be if Wave C extended 123% of Wave A. Its not common, but not impossible either.Trade active
Everything going according to plan! At this rate we should hit $420 within 14 hours. Please note, $420 is the absolute lowest target and there are no guarantees we get there, although it is a very real possibility. There is a chance we stop at the $575 target. The $820 target is almost guaranteed at this point.
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At time of posting, we have hit my first target of $820 and just saw a nice bounce! But don't worry, a bounce is all this is, and it makes our Wave 4 out of 5. This means we have one last leg down before the end of Wave C. Also, if we take a look at the chart below, we can see that our Wave 3 did NOT extend more than 1.618 of Wave 1, which means it is a normal wave. Knowing that we are likely to see at least 1 extended wave in a 5 wave sequence, and since waves 1 and 3 were normal, we can expect Wave 5 to be an EXTENDED WAVE which is necessary for us to reach our target of $575 and/or $420. Buckle up and get your limit orders set!! (Chart accidentally posted in the comments lol)Note
IMPORTANT! I just realized I missed something! Looking at the chart I posted in the comments below, Wave 3 actually WAS an extended wave. The green candle ending at approximately $800 has a long tail that blended in with my fib extension border causing me not to see it. This would mean Wave 5 will most likely NOT be extended. Now it is possible to have two extended waves in a 5 count impulse, but it is very rare and not something we can count on. For this reason, revised targets are now $720 and $820 (based on GDAX exchange). The lower targets are still possible if we get an extended 5th wave, just not as likely as before.Trade active
FINAL UPDATE: We are nearing the end here guys. Attached is my final chart which will explain what I believe to be the last and final move of this correction. We an expect upwards momentum to carry us as high as the red line above ($1011) but based on EW theory we should go no higher than that. Then we should head down for our final wave 5 of C, and expected targets are $820 and $720. Personally, I will have orders placed at the first target as I do not want to miss the next move up once this is over. It will be fast!Note
Had to pop in guys, we are almost at the red line above and seeing heavy resistance. RSI has formed a rising wedge across all time frames and its about to pop. Expecting Wave 5 (final wave) to start any minute now...Trade active
Quick update: At time of writing we have now hit my SECOND target, and although I had believed that this is where the correction would end, I am now convinced otherwise. On Jan 31st I posted the following update:"WORST CASE SCENARIO TARGET: $420, this would be if Wave C extended 123% of Wave A. Its not common, but not impossible either."
It now seems as if we may actually get to this target.
We did not see enough buyers rush in at our second target. Volume was high, but not high enough, and RSI seems to be rejecting backtests of key support levels on the hourly and four hourly charts. This leads be to believe the big boys have not stepped in yet and are waiting for lower.
This scenario also means that my sub-wave count from previous updates was wrong. As that subwave count was based on my first two targets, it is no longer valid if we are heading to the lowest target.
According to the new subwave count, we are currently in wave 4 of 5, which is causing this little spike upwards we are now seeing. Wave 5 should begin after this which will take us towards our lowest target. Keep in mind, it is very hard to target the market bottom, so I would not recommend setting all orders as low as $420. Scale in. There is some resistance at mid $500 levels, so that is where I will be placing the majority of my orders.
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Guys, we hit mid-500's and bounced off the resistance there. That being said, volume was not what I would expect to see from a reversal, and I still believe we have yet to see the bottom (target of $420 still stands). I have been a bit busy lately and haven't been able to update my ideas as often as I would like, but here is what I think will happen over the next few days:From where we are now, we see a last and final push upwards to over $900 for ETH, and this will be followed by a drop that will take us to the lows we have been waiting for (and an end to the correction). I will show you all just how I came to this conclusion when I get some time to post a new idea. In the meantime, here is a chart showing where I am getting the $900+ target from. We are about to break out of a consolidating symmetrical triangle, and this measured move lines up with the uptrend channel above us (in blue) that we fell out of earlier and have been trying to get back into. My prediction is we fail to take it back, and this starts the plummet that will take us to our lowest target.
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And that was not the chart I had intended to post lol, here is the correct chart:Note
On a side note, the accidental chart I posted shows why I am short term bearish and long term bullish. The RSI falling wedge on the daily chart (one I posted accidentally) will lead us to a massive bullish breakout (reversal) when we break out of it. BUT we still have time to move lower before that breakout. We have not been OVERSOLD on RSI even ONCE yet on the daily since the correction started. I believe we will only reverse once we get lower in RSI on the daily. Also not at time of posting we are right up near the top resistance of that wedge. This next little pop that takes us above $900 should get us there, and then down we go.Note
No little pop! I may have been wrong, looks like we are headed straight down. Triangle has broken down.
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