Ethereum (ETH): Strategic Entries and Potential DropsFor Ethereum, we're observing a chart pattern that has developed a weak divergence, and we believe it is now correcting wo the end of Wave 4 of Wave (3). We plan to place multiple entries; our first entry was at the upper range of the Wave 4 target area around $3200. However, the price has continued to decline. We are now looking to DCA and make a second entry at $2600, with a final entry in our worst-case scenario at $2277. We suspect there might be further downside potential, but the extent is uncertain, and we intend to buy additional spots. Those already in from the first entry can choose to hold or buy more—this is on yourself. Given the expected market weakness, there could be opportunities to establish substantial long-term spot positions.
Upon examining the annual VWAP, we're observing a scenario where the 2021 VAH is acting as a current resistance level. We briefly surpassed this level but quickly fell below it again. We believe there could be good entry opportunities in the area between the 2021 VWAP and the 2022 VAH, which closely align around $2,500 to $2,450. Below this, the next significant level could be the 2023 VAH around $2,000, indicating a substantial gap in the middle. This will be elaborated further in subsequent sections of our analysis.
However, this setup on the larger chart presents a probable scenario, yet we're also considering managing our positions above this range as shown above. The 61,8% Fibonacci retracement is still the second entry target for us.
12H
On the quarterly VWAP, we observe that the VWAP from Q4 2021 acted as resistance at exactly $4,100. Since then, we've experienced a downward trend and identified several levels acting as resistance or support. Currently, we're situated right at the 2022 Q1VWAP and the 2021 Q3VWAP, which could provide enough support to push us above the $3,000 mark. Ideally, surpassing the $3,200 mark would be beneficial, but we perceive this as challenging since the current quarter's VWAP is likely to act as resistance around $3,200. We think it's possible we might revisit the levels of the 2021 Q2VWAP to the 2024 Q1VAL, ranging between $2,670 and $2,426. While we don't anticipate falling much below these levels, it's not outside the realm of possibility. These remain our critical levels for now.
4H
Considering the monthly VWAP, there's a scenario where we might see an upward push toward the Previous Monthly VAL, given that the February VWAP has acted as support three times already. This aligns with the desire to see Ethereum exceed $3,200, which would surpass both the February VWAP high and the Previous Monthly VWAP. Achieving and maintaining a position above this level is crucial for a sustained upward move.
If we fail to reclaim and hold this level, it's plausible that Ethereum could revisit lower levels, potentially down to the February VAL around $2,500. Holding above the February VWAP is vital; otherwise, we might see a retracement to these lower support levels.