Technically, the daily chart indicators are correcting from the overbought levels.
Ether Price Made a Top or Correcting?
This past week was amazing for the Ether investors, as the price almost gained by 50%. Once there was a break above $16 in ETH/USD, the price surged higher and traded above $20.
A new yearly high was formed for ETH/USD at $20.62 from where the price started a correction. Similarly, the ETH/BTC traded towards 0.0160BTC, and later started correcting lower.
Now, the main question is whether ETH/USD has a made a short-term top near $20.62 or the current wave is a part of a correction. I would say that the price is under a correction.
Looking at the 2-hour chart of ETH/USD, there is a three-wave pattern formed. The first wave completed near $18.30, and the second one at $20.00. In yesterday’s analysis, I mentioned that the second wave could complete near the psychological level at $20 or $20.20 before moving down once again.
The price completed the second wave near $20, and it is now in the third wave. The current wave could complete anywhere near $18.00 or $17.80.
There is a major support area on the downside near $17.80, as a bullish connecting trend line is positioned. It may act as a crucial support and prevent losses in the short term.
The $17.80 level also coincides with the 50% Fibonacci retracement level of the last wave from the $15.20 low to $20.62 high. So, the $17.80 is a perfect zone for the current correction wave to complete.
We can say as long as the price is above $17.80, the current move can be considered as a correction. Once there is a break, the price may come under further downside pressure.
The daily chart of ETH/USD suggests that Ether price struggled near $20.60, and stated a correction. The most important point is the fact that the price has formed many long term supports at $17.50 and $15.80.