Ethereum failed to break the top of the post-crash range in this recent attempt up, putting longs at risk of retracements. How deep those will be will likely depend on further failures to either recapture highs or break lows. The Fibonacci retracement can assist with identifying those key levels.
ETH Correction Needs a Base Support to Compete
ETHUSDT corrected sharply lower intraday, meeting key support at 38.20% of 1708/2011. Should this get cleared, the next base lays at 50% and 61.80%, at 2234 and 2099 – respectively.
Support at any of the above levels should ease the minor downside bias for a surge back above the local high of 2911. An ideal hold of bears could allow prices to accelerate into wave 3 of (1), likely resetting the bull run.
This move should mark the infancy stages of cycle wave III, which sees double digits in the long term.
Correction Depths Hangs on Medium-term Price Action
However, when looking at the medium-term, we could have either ended wave IV at the local crash low of 1708, or not. This sees an alternative to the above main scenario of minor wave 3 after completing a simple zigzag in wave IV: a double zigzag in wave IV.
Resistance at the 3047 or 3571 should pose a major challenge for bulls and the rigidity of the bull run as it would point to neutral-to-bearish flows into ETH.
This could end up validating a base resistance, targeting wave (X) of IV, and driving prices near the previous high of 4384 while remaining relevant.
What Levels to Keep an Eye On?
However, with the 61.80% rejecting bulls, probabilities favor the double rather than the simple zigzag as the 3047 makes a firm cluster with the base channel connecting primary waves ①-②.
To pave the way to bulls, prices could decelerate to wave ④, offering double-four support, an often seen relation between higher and lower-degree corrections.
Only then would prices have a solid low registered to revisit a bullish scenario. Until then, all eyes should remain locked on the depth of the current correction.