Ethereum Breaks Multi-Year Consolidation

Key Takeaways
  • ETH managed to break out of its 3.5-year consolidation base over the weekend, which is quite bullish on an intermediate-term basis.
  • Initially, November 2021 peaks near $4,867 could provide some resistance, however, it's certainly possible to break back out to new highs.
  • While I suspect that this initial breakout might have 2-3 weeks of upside before beginning September with some consolidation, it should be very bullish technically for the prospects of gains in ETH between now and year-end.

 ETH -5.97% managed to break out of its 3.5 year consolidation base over the weekend, which is quite bullish on an intermediate-term basis. As weekly charts show, the price managed to exceed both March and December 2024 peaks, bringing this to the highest levels since late 2021. This move effectively helps to surpass the resistance of this entire triangle pattern in my view. While I suspect that this initial breakout might have 2-3 weeks of upside before beginning September with some consolidation, it should be very bullish technically for the prospects of gains in ETH -5.97% between now and year-end. Initially, the November 2021 peaks near $4,867 could provide some resistance. However, it’s certainly possible to break back out to new highs. Overall, this is a very bullish intermediate-term development. 

Ethereum Breaks Multi-Year Consolidation
Source: TradingView

Potential ETH Trajectory

This is a possible trajectory for Ethereum following this past weekend’s breakout, as seen on daily charts.  As can be seen, this recent breakout move could represent the fifth wave of the rally from April.  While not complete, it does suggest that ETH -5.97% might not be able to rally through the next few months without some consolidation, which could take place in September.  Any breakout of former all-time highs from November 2021 likely could carry this up to near $5,095 which would equate to an “Equal-wave” projection of my “wave 3” as shown on the chart. Also, it’s important to see that both prior waves higher from the April lows (both waves 1 and 3) lasted almost exactly one-month before consolidation began. Given that the recent swing low made its lowest close on August 2nd before turning higher, it’s possible that if these waves have symmetry in time and price, a one-month rally from 8/2 could be underway, which likely takes ETH -5.97% initially up to $5,095 by Sept 2nd.

Thereafter, I suspect that ETH -5.97% sells off and retraces either 23.8% or 38.2% of the entire rally from April to August/September(potentially) in a three-wave move before the start of a much larger rally, which could result in a larger intermediate-term rally. At present, it’s just proper to say that the larger breakout happened this weekend, and the initial move might last another 2-4 weeks before peaking. Thereafter, dips should constitute an excellent technical risk/reward. I’ll discuss intermediate-term targets when it’s appropriate after some evidence of a minor peak happens. Daily DeMark exhaustion could be present as early as tomorrow, Tuesday, 8/12, on a close above $4,011. However, the weekly DeMark count seems to require another two weeks before reaching exhaustion.

Ethereum Breaks Multi-Year Consolidation
Source: TradingView
Ethereum Breaks Multi-Year Consolidation
Source: TradingView
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