Will Ethereum Be Successful in Topping $200?

The upward after the March 13 bottom has taken the form of an ascending wedge. Cryptocurrency and retail trader @TraderSmokey outlined this aforementioned trading range for Ethereum, showing that the price has just moved above its 0.5 level.

Smokey expressed confusion at what many perceive as overall bearishness for the ETH price:

Someone please explain to me why ETH should be going to 0.

Ethereum’s Trading Range

The Ethereum price has been decreasing since Feb 15, when it reached a high of $289. The decrease continued until March 13, ending with a low of $89.8. While it is true that the price has moved above the 0.5 Fibonacci level of the range, that does not mean that the price movement is considered bullish. It is very common for retracements to continue until the 0.618 or even the 0.786 Fib levels of a corrective move. In the case of Ethereum, the 0.618 Fib level is found at $212, very close to the $215 major resistance area. Therefore, until the price successfully crosses above that level and validates it as support afterward, the current price movement is still considered a retracement rather than the beginning of a new upward trend.

Ascending Wedge

Since its bottom on March 13, the Ethereum price seems to be trading inside an ascending wedge. ETH is currently very close to the resistance line of the wedge and minor resistance area at $205. The ascending wedge is considered a bearish reversal pattern. In addition, there is a significant bearish divergence developing in the RSI that has been developing since April 7. Finally, trading volume has been decreasing throughout the wedge, a clear sign that the price is likely to break down. Since the movement is still considered to be a retracement, this is likely to be the fourth wave in a five-wave downward Elliott formation. The wave seems to be taking an a-b-c-d-e formation, with the price currently being in the (e) wave. Using a Fib retracement in the (d) wave, we can find the likeliest targets for the (e) wave to end, being either at the current level of $197 or near the $220 level. This theory is also in line with the major resistance area and the 0.618 fib level discussed in the first section. Afterward, Ethereum is expected to decrease towards the closest support area found at $150. To conclude, the Ethereum price is trading inside an ascending wedge, possibly nearing the top of its retracement. A breakdown could come from the resistance of the wedge or $220 horizontal resistance. The price is expected to eventually revisit the $150 support area.