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ETHUSD: About to break out on way to new bull run

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Ethereum finished its consolidation in July and is now ready to break out in a new bull run, having formed an initial impulse that set up a trading channel wide enough to support the next few weeks or months of trading.

The start of this channel is marked by waves 1 and 2 in (probably) Intermediate degree of wave five corresponding to the top of wave 3 that represents the existing all-time high.

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For an overview of Etherreum's recent history and the outcome of the correction from May to July, here is chart of the all-time top produced on August 1:

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Since posting this forecast, Ethereum has printed its first waves of the new trend channel, and it indeed offered a nice impulse that has taken it just short of the old high before 2700.

This has resulted in green hour candles since the early morning hours.

Here is an analysis of this action.
Since posting the chart, wave one and two of this impulse were completed and wave three is in progress. In this third wave, subwaves 1, 2, and 3 appear complete, with the market currently correcting in wave 4. Wave 5 should catapult ETHUSD well into the 2700s.

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One aspect in this wave assignment that should draw the attention of the Elliott Wave analyst is that wave ((1)) and ((4)), encircled, are overlapping. This could be understood by assigning a leading diagonal with a 5-3-5-3-5 structure, as described by Prechter. He notes that such leading diagonals are followed by a deep retracement. This is in fact exactly the case here. Wave ii touches down within $6 of the start of wave i.

From the Fibonacci measurements, I believe it is possible that this impulse can take ETH to about 2800 in the fifth wave of the Micro degree impulse, perhaps still today.

Notice that wave ((3)) extended to exactly the 2.618 multiple of the first wave.

The degree assignments here are relative, and tentative, depending on further development of the market. We got to start somewhere small.

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Caution!

As a result of today's advance, and the longer than expected hesitation just above the prior high price, I see the possibility for an alternate wave count that could permit another period of correction at this time. This would assign todays advance the fifth wave past the peak labeled "1" in the original chart, and require a retracement to prices of about 2350. We have to see what develops right here where ETH has just printed 2725.

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Bitcoin has been oscillating in corrective hash at the top of todays advance. It really ought to break free soon, and let ETH continue, which has been pinned to about 2710-2720.

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Did I call this a break out? ... 2818 and running.

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Turns out that Bitcoin was not quite finished with own second wave correction. Yesterday's advance was so choppy that it could not possibly be of the bullish type. The rapid drop this morning below the existing local low cleared the picture perfectly and made possible the assignment of yesterday's leg as the missing fourth wave and this drop as the fifth wave of wave C of a large A-B-C flat that started July 26, finally ending now. This removed the choppiness from ETH trading as well, and let it run free in the last hour. I believe this to be the fifth wave of yesterday's run, for now.

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It's been a good day for Ethereum and Bitcoin, each having produced a nice rally into their respective (new) trading channel. Overall, most of the smart money was on the BTC side, as it advanced around 4000 points from its low this morning. The ETHBTC shows this advantage as it pulled back from 0.073 to 0.068, correcting yesterdays spike.

I thought there might still be enough will to take ETHUSD to 2900, but in the end it was capped twice by structural resistance at the 50% level trend line of the pitchfork, shown in the chart, the first time for wave 3, and then for wave 5. This is the same trend line that approximately limited the top on August 4.

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A few hours later, there is no indication that the market has any short term intensions to correct deeply. ETHUSD keeps pushing in small waves against the overhead resistance zone, energized by Bitcoin's similar action.

It is not clear whether the fifth wave in ETHUSD is complete, while BTC has clearly completed a five wave sequence. The correction for this seems to be complete in its wave count, an ABC flat, but is fairly shallow.

My bias is that this rally will continue.

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ETH got almost to 2900, but just short.
At the top I seem to spot an ending diagonal in the fifth wave position, which probably means we should expect no more today. Perhaps some larger correction is in due.

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Perhaps just a diagonal in the next first wave... Bitcoin seems to keep pushing up, and ETH now does show us 2900 for a moment.

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I think one more push in the newly formed fifth wave is due, if I counted correctly. Since the last chart, ETH printed another diagonal in the third wave, leaving the completion of a fourth wave correction, and the last effort probably for today, and for this trade, with a push beyond 2936, the current high.

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Fifth wave completion seems imminent. Perhaps one more Olympic spike toward 2999?

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Well, the spike didn't happen, quite the opposite in that diagonal. So, I am not convinced the run done. Reviewing the wave assignments, I seem to have a mismatch in wave degree, as measured by channeling. A different assignment can be justified to insert an extension at the bottom of the run, that justifies another leg up. We have to see the outcome of this correction, that so far has taken ETH down to 2884.

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Here is a new wave count of today's rally.

I think, this takes better account of wave degrees, as obtained from Elliott's channeling technique. It provides better shape or form of waves. It also agrees with Fibonacci measurements. Wave (iii) at 2949 comes in just under the 2.618 ratio to wave (i), a perfect ratio, especially when extended, as provided by the i/ii and ((2))/((2)) sequence.

It is not clear yet, whether the correction (iv) is done yet.
The entire impulse should be concluded in wave (v), right around the 3000 mark, which is located right at the 1.618 ratio of wave (i).

Let's see what the market delivers...

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Bitcoin (BTCUSD) seems to be game still for some more upside, and my count has been clearly missing a wave at the top there. It is pretty much at the top of its major resistance zone, and clearing it decisively, would be reassuring.

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Having cleared its major resistance zone, Bitcoin is bound to continue its up-trend, the wave count there is still in a third wave, I think. The fourth wave should also provide some consolidation for ETHUSD, which has rallied into the weekend. We could see further upside from the public/retail investors, who sometimes power the weekend action.

This rally overnight (US time), stronger than I thought, is headed right to the 4.236 multiple (@ $3180) of wave 1 of wave 5. Woah.

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This chart shows my current wave count and the Fibonacci levels that governed this rally. The 1.618 ratio that I thought might be the end of wave (v), turned out to be just wave i (roman 1) of (v).

I am not certain that what I have tentatively as iii and iv, might not be an extension 1-2, because its shape seem more like a first/second wave combo, rather than 3/4.

The market is in a consolidation from this leg, and its depth might tell us more. There is overlap already with the presumed iii, so it may indeed be that, because a wave four should not significantly trade into its wave one.

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The Ethereum resistance zone, at least the major levels (in orange in this last chart), have been obliterated now, and should be considered levels of support.

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A deeper retracement has indeed begun. Bitcoin has also broken its trendline of the past couple days, as show in this chart:

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After closer look at the wave counts in the smallest degrees good for 1 minute charts, I can easily see this running another 100 or 200 points.

The consolidation from the top has so far only gone into the area of the previous fourth wave consolidation of lower degree. It appears to be an ABC flat, where the C wave doesn't extend much beyond A. I used this fact to assign the 3-4, 3-4 sequence in lower degree. The last oscillations with upward slope are either the formation of 1/2 for extending the C consolidation lower, or a 1/2 for an upward completion of the trend.
Here is the wave count:

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It is also noteworthy that this consolidation so far has been limited by the top of the yellowish zone, which was formerly the resistance zone, now it does seem to function as support!

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So, the retracement was a clean ABC zig-zag down to 3000, perfect with A = C. It was deep, almost 78.6%, but stopped just short of wave i (roman 1), so no violation there. The rapid rebound seems to confirm further upside, and that might run to about 3200, for the 1.618 ratio to wave i, unless there are extensions once again. The 2.0 ratio is at 3238, and 2.618 is at 3316,

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Markets are deceiving, I think Mandelbrot states, and this perfect zig-zag has turned into a perfectly acceptable triangle. An expanding triangle, just waiting to do great things... I think it is waiting for BTC to break out, which has also formed a perfect zig-zag but no triangle. It seems building some kind of first wave up.

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Actually, such a triangle could also be drawn for BTCUSD, but it looks a bit stranger.

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Since the market is so deceiving, I think I need to change my assignment of this expanding diagonal... The market shows that it is instead developing a leading diagonal after the consolidation, which was indeed just a zig-zag.

Leading diagonals can retrace deeply, so it may seem the market is reversing, but only for a short time. The same happened yesterday, but on a smaller scale.

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The diagonal has finally identified itself as an ending diagonal. They occur primarily in the fifth wave position after a preceding strong run, which cannot be denied here. The wave put in a new high at 3192, meeting on the dollar, a 1.618 Fibonacci target measured on the chart in a previous update here.

A fifth wave requires a deeper retracement, which has been in progress and is easy to recognize.

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This is a good time to reconcile wave counts, make sure that wave degrees are properly represented, to plan for the next stage.

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I can come up with several larger scale wave counts here, one of which calls for a correction of the entire leg from 1700 to 3200. This can be severe, if it materializes, up to a 62% retrace, which would mean the area of $2300.

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The retracement of last evening is still in progress, despite the sharp rally this morning from approx. 2890 to 3150. I am now certain that this is a triangle correction, almost completed, with only the E wave missing. The sharp rally this morning is the D-wave of the triangle. D-waves often race to the opposite trend line, and can be very deceptive. This triangle is the reason that the Ethereum price is still confined to the width of the structure, capped just under 3200.
It is a slightly expanding triangle. Its first leg was the sharp A-B-C that I discussed previously, pictured in the last chart, but labeled prematurely. In fact most wave counts of the chart are now obsolete.

Bitcoin seems to be correcting slight differently. at this time I am not sure that it also has a triangle, but rather a flat. The price was therefor not confined, but create a new high this morning, over 46000.

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The E-wave formed just as expected, and the triangle appears complete. Bitcoin in the meantime has continued to a new high at almost 46,300. BTCUSD has a major resistance line at 47.000, which stems from the beginning of the entire correction in April. In a way, this line divides many bullish wave counts from some of the bears.
Naturally this is going to set ETH's direction. We know that whales have been accumulating BTC in the low-30k range. But this needs close attention.

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A significant indicator for BTC long & hold strategy is the BTC hash rate, whose indicator just turn bullish this weekend. I believe Ethererum's indicator is also about to mark such an event, but hasn't yet.

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Warning: I believe Ethereum has formed a major 1-2 sequence against the trend, which means that we should expect a reversal for the time being. The 1.618 extension of this can take down to 2700 or so, for just the third wave, if this in fact materializes.

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With a new high of exactly 3200 in ETHUSD (COINBASE) this scenario (the warning) seems invalidated, as a wave two cannot trade before the start of wave 1.

But in any case the resistance at 3200 for ETH and at 47000 for BTC seem formidable at this time.

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My best guess at this time is that ETH is going to work its way in a somewhat horizontal manner back to the bottom trend line of its trading channel, i.e. the right green line in the original chart. 3200 seems to continue to be resistance, and the support zone (formerly resistances) just underneath. This might take a couple of days. There now is a large expanding diagonal at the top, perhaps it can be grown larger somehow.

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As I forecast in an update here just yesterday, the Hash Rate Indicator for Ethereum has finally turned green as well. This means that 1700 was indeed a macro low point in the market.

It is shown in a separate TradingView Idea:

Ethereum Hash Rate Ribbon Indicates Bullish Outlook

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Ethereum succeeded to break 3200 for a short look up today, during its current cool-off period. This should make it easier to get past it, very soon. I think, both ETH and BTC are getting close to the next leg up in their respective channels.

The wave count of this consolidation top is difficult to decipher, and there is a chance for a break-out at any time now.

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I think the most reasonable count at this consolidation top wave 2 might be the following. I have it as a triangle correction of the previous five-wave impulse sequence. Wave 2 has been creeping up the trend channel, so it is now way over the extreme of wave 1, just as was the case further down the ladder.
We can tell by the behavior that this is still all corrective action, not impulse. It's been very choppy with small waves and lot of retraces.

Wave E of the triangle appears to be forming right now, and this could take the price a little down from here, even a little past 3200, for an over-shoot of the trend line, but when completed, prices should burst upward much cleaner.

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Ok... It is about time for this correction to end. On the hour, this correction has taken exactly the same time as the five-wave impulse up, or 113 hour bars. Who can bear more?
The triangle assignment was not what the market had in mind, clearly. Triangles can be fit into many places in corrections, even with proper subdivision, as almost anything can be broken into threes. It sure was deceptive, revealing something larger at play only after that well-formed "E" wave. Perhaps it was a triangle inside a B-wave of a three.

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Something is for sure, the market did seek that trend line of the channel, as I postulated once earlier...

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Don't like what I am seeing beyond the trend line here. In ETH, nor BTC. It has some impulse character, by not enough volume and energy. It may just be a counter wave to the local down trend of the last day... for continuation/extension. Caution. BTC must break 47k.

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This looks like an ABC for further downside.

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VWAP for probable invalidation is about 3150. On BTC it is 45500.

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Decisively invalidated... The overnight rally took ETH almost to the recent high, but more upside is expected, as I don't think the we have seen the completion of the fifth wave yet.

The chart shows the preliminary wave count for this rally.
Notice also that the VWAP level was indeed significant, as prices bounced off the 3150 resistance from the prior session VWAP twice (red line).

BTC acted similarly, and stooped so far short of the 47k resistance.

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The reason for the slow trading at this point (ETHUSD = 3245) is Bitcoin, I believe. It is battling the 47000 line, which was the extreme of wave 1 of the major correction wave in May. If this is broken to the upside, all bear trader scenarios that postulate this just being wave 4 (instead of a bull run) of a larger scale correction are invalidated. This chart bears that out. The line has been the major resistance line for days, and now it is causing choppy course upward just under one of the Fibonacci trend lines of the trading channel. In fact, it is obvious that almost all price trends in the chart are governed by these trend lines. I have emphasized some in red to draw attention.

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POP POP POP. BTC ejaculated into the upper 47000s, and now ETH will be free to run as well.

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BTCUSD:

ETHUSD:

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Wouldn't be surprised to see 50k ETH this weekend. I don't think there is much resistance in between.

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I have been waiting for this for hours... of course it happened after Wall Street closed. There is only so long that even the market can drag out the end of a fourth wave. From about 8 AM to almost noon, and then a similarly dragged out first wave camel back, and then it goes up the neck. The wave count is full, and if the wave count is full, the fat lady sings.

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After completion of five waves, prices often pull back by 50% to 62%. It was about time that the market delivered a sharp correction... the law of alternation at work. We haven't really seen one in this entire run. It's especially meaningful at this stage, because this price range is also the location of the 61.8% Fibonacci retracement level of the correction of May-July. The chart should display a clear extreme at that point.
This retracement represents a 50% correction of the last five wave move.

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After consolidating my live-running wave counts, I find that this last retrace was just a fourth wave, and we should see a fifth wave right now.
Elliott channeling and Fibonacci extension seem to converge on a maximum level of 3500 ETHUSD. Can't promise a thing, only doing standard EWT analysis.

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Here is the chart for that:

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I have two 1-2 sequences for that wave, with a Fib scale for each. This may turn out as a single 1-2 only, but the two logarithmic Fibonacci scales match fairly well.
That is if this materializes at all. It's been choppy around here.

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That wasn't so hot, my counting. IT's clear the market wanted a larger correction and now it is over 50% in ETH and BTC, a little deeper in BTC. The most typical fourth wave correction is 38%, so the five-wave count may have indeed be full on the prior ascend. The entire correction can be counted as an ABC, not a perfect zig-zag, but close. In BTC, the first leg down looked like a complete three-wave correction, sp perhaps this is better called a flat (3-3-5), which also makes sense by the structure of B, rather broad and choppy. Took almost a whole day to unwind. The C-leg, overnight, was choppy too, and seems incomplete, but the final stage may have been pushed up by the prevailing trend. Nevertheless, i expect some better completion down, for the final wave 5 of C.

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Ok, that was a very timely observation. BTC indeed just spiked down below the existing low, to complete that fifth wave of C, given itself and ETH the permission to rally up. BTC is already 1000 points up, and ETH is back at 3200.

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I actually don't like the entire look of this yet. I am not sure the correction is finished. It is deceptive at best.

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At least, the retrace of this 1000 point spike in BTC seems unfinished.
I am not even sure it was an impulse. It seems to have a three-wave structure, but on this small time scale with minute bars, it is impossible to tell.

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I think this is all still part of the corrective wave structure that started on August 7. I had it classified just as an ABC flat, but we can draw a trend line from the impulse top, via top of B, to the high of August 13.
This would form an ABCDE triangle, and we are right now at the tip of wave E somewhere. Action has been choppy for days, and this is what is the character of corrections.

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Here is the chart for that... I showed this a few days ago, it is now updated with emphasized labels (wrong degree) to make my point clear.

So, given the enormous size of this triangle, we should expect an enormous result coming out of it.

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All smaller degree waves are not adjusted properly, just ignore them. I had this labeled as a 1-2 sequence, and that should not change, but could. It just means the possibility of a very large third wave unfolding in the coming hours or days.

The E wave seems to have a three-component structure already, which is required of all five waves inside a triangle. But this proposed E-wave could certainly extend further down, or it could just explode to the upside any time.

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It could conceivably be a fourth wave of the largest degree wave from the 1700-bottom. If so, the third wave would have exceeded the first wave in size by a little bit, which fulfills the Elliott wave requirement, and we would expect the fifth wave to be very long and probably extended. Even a 1.0 multiple would reach the old ATH, and 1.6 would extend it much further.

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But the Bitcoin chart does not support this, IMHO. The third wave would be too short, there. I think as of now it is better to consider it, in ETH, as a 1-2 sequence.
The largest degree wave of this run from 1700 has to reach far beyond the old ATH, probably to 10k or 20k.

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This has got to be the correct interpretation, and explains why I had troubles assigning a clear five waves to the last leg up. It is a "three"!
The legs of a triangle are threes.

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E wave seems finished. The emerging wave from the E-bottom (3113) appears strong and a clear linear impulse. Break-out seems likely. But BTC has developed what looks like a leading diagonal, and those usually require deep retracement.

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I'll be glad, if we get out of this structure, upward. The market still has not invalidated the bear's idea that this could turn around. This "triangle" could also be an ending diagonal in the fifth position of the whole leg.

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I suppose, from a traditional TA point of view, if Bitcoin holds current levels (46.7k) for another three hours or so, for the weekly close, this would be the most bullish signal in the entire run.

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3333 is the battlefield.

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They sure took the shorts to the cleaners there, with a $30 pullback. And probably some longs too. ... 3341

Meanwhile... BTC exploded with a $600 dollar candle for more than 1000 .

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So after breaking the old high price in ETH, trading seems pretty timid. Mostly sideway action and drifting. The order books are also pretty even between buyers and sellers.

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Here is the Elliott Wave assignment for this pretty rally.
It was a complete five wave structure, exactly dimensioned to take out the old high. Amazing... How does the market know to do that so precisely?

This is a 1 minute chart with the smallest waves indicated in Minuscule Degree.

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The triangle that I drew at the top of the rally, past wave (5)/((5)), developed into a much larger structure over night.

As bullish as all this appears, ETH is not out of the (bear) woods just yet. The arithmetic 0.618 retracement level of the drop from the ATH to about 1700 is at 3359, while It already has taken out the logarithmic level at 3053. I'd like to see both taken out and well traveled past. Generally, I prefer logarithmic levels, but most people probably don't.

The current point of the market would be the ideal place for a market reversal, having completed the triangle and a five-wave sequence out of the E-wave extreme. I would like to see a decisive break upward completely out of the triangle.

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Market fate is up for grabs right here, after a sizable retracement of yesterdays rally, 78.6% for BTC, and over 65% for ETH.
It's down to a single, small wave to decide whether this was retracement, or an impulse downward.
The market is looking north on 1=minute bars, but we can't let it fool anyone.

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For invalidation of the bear scenario, ETH needs about 3260.

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Here is the developing chart. I don't like it. Haven't spotted a bullish recovery from the retrace yet. There is a diagonal or triangle forming. A leading diagonal for the trip up? or a triangle correction of the leg down? Can't tell right now.

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The situation is perhaps not as dire, but this "retrace" ate 98% of the preceding rally. I finally figured out a wave count, for what really looked like a five-wave decline, but by using channels I can discern a three-wave ABC expanding flat, in which the C-wave did the most damage, as usual.

The price now has exited the descending C-wave channel, looking upward.

How this fits into the overall wave patterns is not quite clear to me, yet.

In BTC, the C-wave penetrated past the price of what I called the the E-wave of the larger triangle. So, that is an unresolved count as well.

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Out of the expanding flat, ETH has developed another three-wave sequence, a hump and an impulse, that looks like it could launch a large spike upward. My guess right now is that this is all still part of a larger E-wave structure of the giant triangle (pretty much a parallel channel flag).

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Woah, and there is the spike... Let's see how large it is. Such a long correction (the ABCDE) should produce a lot of energy.

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Well, not exactly impressive. Just a small fifth wave, it seems. Something ought to be building out of this.

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I still don't like any of this. A three-wave structure out of the triangle area could mean a retrace for a downward impulse.

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Alice: “Would you tell me, please, which way I ought to go from here?”
The Cheshire Cat: “That depends a good deal on where you want to get to.”
Alice: “I don’t much care where.”
The Cheshire Cat: “Then it doesn’t much matter which way you go.”
Alice: “…so long as I get somewhere.”
The Cheshire Cat: “Oh, you’re sure to do that, if only you walk long enough.”

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Possible bearish wave count (red labels) for case of market reversal:

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Here is a vision of what might be evolving. This would create a very wide 1-2 base for the future of Ethereum. I thought this might be happening past the existing ATH, but after all we are not so far away from there, only 30% or so, after an impressive rally from 1700.

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The purple trend line at the bottom is a long term support line that started at the bottom of the Covid crash, and was touched once before in the fall of 2020, so it is not a figment of imagination, with only two points. I think it has high significance for past and future.

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The macro view of this idea is shown in this drawing.
When comparing the size of waves of same degree with those of the run up to the existing ATH, then this makes a lot of sense. It obeys and fills the existing trend channels.

NB: I omitted the highest degree wave labels (presumably Intermediate Degree) while reexamining those.

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This also obeys the Fibonacci ratio of 0.618 for the retracement of the ATH, to it has significance in the future. In a completed chart, those levels can be found all over in the significant extremes of waves.

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Any thoughts?

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Ethereum price has now broken down the lower trend line formed since August 9. People will probably take that as a sell signal. So, if ETH wants to change its mind, it should do so quickly.

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Market depth/order book looks much more red than green. And it's not very nuanced.

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In ETHUSD, I think 2400 is probably a good target for wave 2 down toward the LT trend line. That's about a 50% retracement. I doubt it will go deeper, because there is strong support in that area from wave D top of the summer correction.

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Price has penetrated the sub-3000 area for a first taste. Wave counts show clear downward impulse in progress. I think that confirms a wave 2 correction. I don't think it will take long to unfold. Downside target might be reached before the week is over.
We have to figure out what kind of wave this is. I can imagine that the A and B legs are already obscured in the extended sideway structure. That would make it an expanding flat. The first two legs of that are threes, and we certainly had enough of them up there. OTOH, a zig-zag is a five-three-five, and ideally A=B in size.

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Wave structure of our proposed wave 2 down is still unclear. The descent has slowed over night, with price recovering to about 3090. This looks like the fourth wave correlated to a presumed wave 1 at 3145, but it could also be the B-wave, if the case can be made that wave 4 and 5 are already present in the hash before. Clearly this is not easy going... the bulls are putting up a fight, not realizing that this is going to make ETH even more voracious in the third wave.

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Despite the intriguing structure of this 1-2 sequence touching the LT trend line, I am not 100% confident that the idea of this being a wave 2 correction is correct. I think I can think of other wave counts, for example, it being a fourth wave. We have to watch the depth of this, that will make the difference. But so far it hasn't even come close to the .236 level.

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up or down? That is the question.

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The bulls have been fighting this correction tooth and nail, got the market back to over 3100.

But from what has been printed so far we can perhaps estimate a channel and target. Based on this chart, it seems unlikely to reach the LT trend line (green dashes) but it doesn't have to. The 2400 line seems within reach given the size of the first four waves of the presumed A-wave.

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I am not confident that this "wave 2" is going to materialize as proposed.
The reason is that I have a hard time justifying a five-wave sequence being completed from the $1700 bottom with proper wave relations between. The most obvious 1-2-3-4-5 count produces a 3rd wave that is just too small, the shortest of 1, 3, and 5.

When playing out my original chart in this post (at top) to produce the later prices, we see that I had placed a wave 3 label in about the place of the top.

This still makes the most sense, structurally. If this current down-trend is a wave 4, it already retraced 38.2% of 3, which is perfect. But clearly the wave sequence down does not seem complete, does it?

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Moving wave labels around a little bit, I can see that only one more push down is needed in wave 5 of the C-wave.

This would round the picture and account for all waves at the top.

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I think this works out in BTC as well.

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ETH needs to put in a new local low, that is 2950 or lower. The support is huge at 3000, prices are bouncing on it on and on. It needs support from BTC to put in a local low as well. 43,700 for ETH corresponds well with a price below 2950 for Eth, given the current ETHBTC ratio. BTC is bouncing on 44,500.

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I am very curious to see how deep this wave will go. The above is one scenario of large scale wave counts, I have another that would take ETH to about 2600.
Meanwhile, ETH is still pounding on 3000.

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ETH has been bouncing between 3020 and 2960 all night. Is a break-out in the making?

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This is the idea:

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or a 1-2, 1-2 sequence

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Rather than the start of wave 5 up, this impulse was probably the C-wave of wave 2 of the last wave, wave 5, down in the correction. It just doesn't seem complete.

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The indicated correction patterns have been pretty much invalidated now, by a spike up to 3165.

Corrections eat price and/or time. This one has done neither sufficiently, IMHO.
As long as this stays in the correction zone, I won't trust it. There is always a larger pattern of correction possible.

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ETH end BTC have put in large spikes toward their highs, BTC is only held back right now by the 61.8% correction retracement level, just a few dollars away. This is where we'd expect this run to end if the correction is still in progress.

ETH seems to have been pushing harder than BTC, and is less than a hundred dollars short of the high. The odds are for continuation to the up-side, I think.

The only scenario for downside right may be that this has been a large wave 1 in the making for an impulse south, but if ETH marks a new high that is invalidated, too.

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Odds are dwindling for more downside here. Overnight, ETH and BTC have maintained their bull flags at the top of their impulses, and have now moved past them, approaching their highs of their bull runs.

By my count, the ETHUSD correction to 3250 corresponded to almost exactly 38.2% of wave three. I think the depth of correction verified our wave count that this was a fourth wave correction, and that wave five is now in progress.

I am projecting that the dimensioning of waves so far, makes it entirely possible that the fifth wave can go all the way to the ATH. I have a target box of 4100 to 4500 at the top of my chart, that corresponds roughly to a 1.6 and 2.0 Fibonacci multiple. On the arithmetic scale it is only about $100 lower. This is still possible by the first week of September, given the current trends, and Elliott channeling. Fibonacci time sequencing has shown some interesting confluences with price points in the past, and that could continue to hold for a peak around the end of the month or so, or the week after.

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For validation, we need a new high in ETH and BTC. Currently at 3263 and 47828 highs in this attempt. There is clearly some resistance here.

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I wonder what it takes to break 3300.

Today, BTC is leading ETH, yesterday the roles were reversed. BTC roared past 49000, while ETH is still grappling with the 3300 resistance. This also stalled the BTC run for a while. Increasingly, I observe that Ethereum is definitely growing in its market influence, also on BTC. It is not just a follower anymore. Some people are forecasting that ETH with surpass BTC in size in the coming years.

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End of the fifth already? Failed fifth in ETH?

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The wave count of this entire leg is clearly missing its fifth wave.

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Perhaps this is better:

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Upon close examination, I find that the top wave must be counted differently.
It started out as a leading diagonal, and I even emphasized this fact by drawing trend lines. So the entire wave to the top is just a single wave 1. A leading diagonal requires deep retracement, which is exactly what the market is doing.

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ETH still did not break 3300 under heavy push by BTC to mid-49000. Very interesting, it may suggest that the five-wave count for ETH is full already, and we do have larger wave 1 completed. BTC and ETH do not have to be synchronized by wave count, they are only generally synchronized in market direction.

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Interesting and puzzling stuff that the market delivered overnight.
The 3300 did get broken finally, but I think that may be almost all corrective.
That may be why the 3300 didn't got broken until the morning.

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So, I think that the fifth wave to this is still to come.

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Here are some ideas for these waves, just unsorted and not prioritized.

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BTC did no better.

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Who makes this stuff up?

damnatio ad bestias.

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Ending diagonal? Leading diagonal? Straight impulse ?

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ETH seems to have formed a nice 1-2 sequence out of the that funky overnight-structure, now in 3rd wave from 3257. It should end at about 3350 to reach the existing ETH high. That is roughly the 1.618 multiple of wave 1.

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Chart:

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The same scenario has evolved in BTC, with a first 3rd wave target of about 50.9k.

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Hmm.... not terribly impulsive, is it? I wouldn't enter a new trade for this.

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BTC is doing better, at least is past wave 1, and has a new high now.

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ETH remains a bit of a puzzle, BTC is pushing toward 50,000, and ETH can't make 3300 for good.

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It is entirely possible that this rally from 2950 to 3300 is still just part of a wave 4 correction, in form of a large triangle, of which two legs, A and B, are in place.
BTC may already be in the fifth wave, but would now require some correction also, especially ahead of 50,000 which should present resistance, I would think, just from the numerical aspect. So they could both be correcting at the same time, but in different stages of their waves.

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The solution to this little wave puzzle at the top of the current rally is this:

A diagonal with an A-B-C correction, unless there is more to come on the downside. But the price as settled, and BTC has basically done the same, except it printed a higher high in the process.

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With "basically the same", I meant the last wave only. BTC did not print the same diagonal. Its fifth wave just the last impulse, I believe.

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Here is BTCUSD:

It came within 170 points to $50,000. The resistance kept this wave pretty short.

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I would think this rally needs more correction, than those little zig-zags at the end.

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But Bitcoin seems to want to keep pushing after a retreat by a thousand points.
The news and outlook for Bitcoin and other cryptos in general seems to be extremely bullish, especially after Bitcoins performance this week, easily recapturing the moving averages after the weakness at the beginning of the week. Spot buying pressure seems to be continuing during the weekend, which should exhaust supply to push prices beyond the 50k mark.

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Here is an interesting measurement in the recent ETH chart.

In the lower left corner is a wave structure that I had tentatively assigned as part of the previous wave 4 correction. Taking a measure of its size, I find that it is exactly one half the distance to the top of the impulse, within one dollar. The corresponding Fib scale is shown in green level lines.
I have found that the Fib level 2.0 or 200% is quite common in the ETH chart.

This makes it tempting to assign the blue square bracket wave labels, meaning that the market is right now in wave 4 correction, and we have a fifth wave to come in this sequence.

Now, Fibonacci ratios exist between a lot significant points in markets, even if those points do not have direct Elliott wave relationships. So I always reject the idea to verify wave counts by Fib ratios. They only make it more likely, but verify nothing.

Also shown is a Fib scale in red shade for possible retracement levels for this correction.

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A problem with such an assignment is the misfitting count of waves to make a five-wave structure out of that "wave 1".

A supporting aspect is that this wave four occurs right in the area of the previous wave 4 on one lower degree, which is a major guideline for forth waves in the Elliott principle.

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I cannot stop wondering whether the ETH price is confined by structural constraints, rather than just overhead resistance levels. Yesterday it pierced 3300 a few time for brief moments, and in the past it had no trouble reaching 3350.

BTC doesn't seem to have such a problem.
Could this wedge (red) be in early formation?

Each leg in the wedge has a clear 3-wave structure so far, as it should.

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Shortly after I posted the wedge idea in the last update, the market dropped into that wedge as if it liked the idea. We'll see. BTC dropped just the same sharply to the 41.8k level, which is support right now from the high last week. That needs to hold for further moves on the upside. I do expect another push to break 50k before the weekly close tonight. It should be interesting to see ETH's reaction, if that materializes.

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If there is going to be such a rally into the weekly close, it better get started pretty soon. BTC has a long way to go to 50k, from here, at 48.5k.

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ETH looks even more sleepy.

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September is approaching fast, and the statistics call for a month when bears awake. Actually it has started in August at times. We could have our fifth waves in place already. I thought BTC would run to about 57k before wave 1 would be completed.

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BTC has finally shown something of a completed corrective structure, a complex show of an A-B-C with diagonals in A and C. So there is finally a chance for a weekend rally. Will it materialize?

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We got a rally!

BTC has added over a 1000 points, and regained 49000 and ETH is over 3200.

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We should break 50k easily overnight.

I am also clearer about the reason for ETHUSD price limitation recently, not breaking decisively above 3300. Turns out, that the ETHBTC exchange rate has dropped to 0.066 or so. With that, we need a Bitcoin price of about 50,700 for ETH to make a new high.
Lesson: look at ETHBTC daily.

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ETHBTC rallied along with ETH last night, so that ETH actually took out its old high much sooner than 50.7k for BTC.

So, BTCUSD got to over 50,500 and ETHUSD to 3366.
What a Blue Moon can do, lol.

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The key for this week is to monitor for any signs of weakness and the end of wave 5 to complete wave 1 of higher degree, at least to my currently preferred wave count.

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Anyone getting this weird stuff today?

Here is my view on it. Perhaps I should wait till the market has moved on, I thought this was finished already a few hours ago, but the beast in the forest had new tricks.

The rally of last night was corrected by a double-three structure consisting of a flat and an expanding triangle. I expect some kind of strong impulse coming out of this now. If correctly assigned, a double-three with a triangle in second position cannot be expanded.

The top of this structure was apparently restraint by the arithmetic 0.618 fib level of the bear retracement. I don't often use arithmetic fibs in crypto, but I turned it on here to check, because many people probably do, and this is such an important market position. The logarithmic level is long behind us.

BTC was funky too. Perhaps not surprising at such a round number, 50000. But there is also real resistance ahead.

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If this is not finished, then we have to reconsider. I suppose, the double-three could be expanded by breaking the triangle into components, and then adding something.

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I still think this correction is basically finished. ETH did stage a rally from what I have as the E-wave, or Y, and crossed the triangle trend line easily, but ETH failed at 3360, a dollar above the 0.618 line (by my data feed). As the five-wave count was full, the market turned down and printed an A-B-C counter wave for correction, and is now back on the upswing. Meanwhile, BTC also failed just before 50k and reversed similarly.
It will take another attempt (or two?) for a close above 50k.

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Here is what I see in Bitcoin:
It also formed a double-three combination wave, but with a zig-zag and a flat.

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The market has formed an ominous formation of a diagonal for the entire period that we call wave five.

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There is a chance that the action since the weekend, starting with the late Sunday rally is still part of the wave four correction (per my count) and this wedge is just wave B of a large flat, which still needs a C-wave down, or completion of the C-wave. The red zig-zag trace in the chart is wave A.

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Two hammer candles on the 4-hour bar chart for both ETH and BTC is potentially bullish. BTC has been holding the support zone below 48.1k pretty well, and this is important aspect. It seems now that supply might be exhausting in this area pushing prices higher again.
In the news... Microstrategy filed an 8-K today, that they bought 3907 bitcoins for approximately $177.0 million in cash, at an average price of approximately $45,294 per bitcoin, as of yesterday.

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The course of the past few days feels like the personality of a wave 1 and, today, wave 2, especially in BTC. The deep retracement is typical and it feels like the bears are in control and celebrating. Typical wave 2. It's a bear trap, though.
This gets me to a larger aspect, when looking at the entire rally from the 1700-bottom, and 30k in BTC. It seems to me that we have already had multiple wave degrees in play. We must be careful not to confuse the largest waves so far and simply number then 1, 2, 3, 4, 5 in sequence. It is possible that we have had multiple, at least two, larger degree 1-2 sequences. I suspect ETH is going to 15-20k in this run. For that it needs a large base at the bottom to host about three larger degree waves. Same for BTC, which may well go to 150k to 200k. I am thinking we may have already seen the two largest 1-2 sequences. In my original assignments while the market was still meddling in the bottom waves in June, I had a 1-2 sequence assigned for both, coming right out of the lowest point of the correction in the first week of July. It is very typical to have 1-2 waves closely associated in time and price with the final correction waves. We should not count those right now, because the degree is too large to integrate with the rally, but they will or might come in play later, when the new trend is more mature.

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ETH and BTC are trying hard at a comeback from the overnight lows. About 3080 for ETH. But so far I can only see this as a counter-trend move, it's a bit choppy and has a three-wave structure so far. More down-side might be expected. Perhaps this is the infamous September pullback. Overall, I see this more or less as a sideway movement in the overall chart. Sideways is not bearish.

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The recovery became a bit more impulsive after the first wave (a leading diagonal with a sharp a-b-c correction). It looks impressive really, climbing to 3230 or so, but I can count the overall advance also as an ABC. This might just be a B-wave, the second wave of the entire correction.
It did break above the down-trend channel very nicely, so we have to look for decision about continuation.
ETH and BTC are so far basically correcting horizontally from the recovery from what can be counted as a five-wave leg. We'll have to see whether this is just a first wave up, or the B-wave.

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Chart:

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If BTC can master this 49000 level right now, or ideally 49200, I think an assault on the area above 50k in BTC is close. BTC bounced off the support area, 48.1k to 47k from previous extrema.

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I do expect this barrier triangle in ETH to break to the upside.

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The 62% fib retracement level from last down trend (49,200) remained a barrier for BTC, but it is trending upward, even in its correction from the fifth wave of this reversal. I think the final diagonal in the C-wave of the correction is just about finished, and that might unleash a strong move. In case of failure, more downside might be needed.
ETH should follow.

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And ETHUSD:

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After a day or more of scraping on the bottom of this pullback, there are indications that this is a local bottom as the volume has been diminishing.

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The possibility of a local bottom is also indicated by the rhythm of a 150-hour fibonacci time multiple, that occurred last night, the sixth since the 1700 lows, and I was very curious whether it would produce yet another significant market event.

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In this chart, the green vertical lines are whole number multiples of the 150-cycle, counted at the top, and the orange lines are fractional periods, with labels in the center.

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Correction: 150-hour cycle...

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This interval also occurs in BTC, btw, but that is not surprising as the two trade in the same "rhythm", essentially.

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ETH needs to reestablish itself firmly above 3250 to confirm the local low of 3050 of yesterday, as BTC is trying to recapture the top of the 41.8k/46.5k support zone that contained the pullback this week. So far it seems the 150 h indicator is on target. Perhaps we get a new significant high on its next visit next week.

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Break out is not going to happen right at this point, I think. BTC ran into a trend line of the down leg from the top, and I am not sure that the structure (triangle or diagonal) is complete. Perhaps this will not take long.

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Ah, never mind... just took a second push... looking at 49k again. and perhaps 3300 in ETH. Just need enough volume to keep this up.

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So, after a night's rest and some consolidation in the fourth wave of the move from the local bottom yesterday, BTC is ready for another try at a break over 50k, and perhaps ETH can finally produce a new high as well, with enough energy from BTC.

Both have established a new channel from the local bottom. I am only showing BTC here, since it is the driver of it all.

BTC has produced a clear five-wave sequence of which waves 1, 2, 3, and 4 are completed. Wave four, (iv) was the consolidation over night. it moved the price to the lower trend line, and then some in a sharp spike downward, to produce almost a 38.2% retracement, certainly good enough for a fourth wave.

A possible scenario for the dynamics of this attempt is given by the Fibonacci extension scales. By confluence with the overall size, it seems likely that the fifth wave might end up in the area between the 2.0 and 2.618 multiples area, shown as a green box at the top.

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Here is the optimist's view of that for Ethereum.

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Ethereum and Bitcoin finished their month-long correction this morning. The final pattern is a running triangle with five three-wave legs, A,B,C,D, and E.
Shortly after finishing wave E, ETHUSD began to rally and has already broken the top trend line as seen in this chart. At the same time ETHBTC began to soar, marking a faster recovery from the correction area than Bitcoin.

This marks the beginning of the next phase, wave 5, in this run from the 1700 bottom this summer.

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A running triangle is a triangle whose B-wave exceeds in price the beginning of the preceding A-wave that started the triangle. This is a very common pattern, and occurs when the momentum of the ending trend drives prices higher still in correction.

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While the price action today can be taken as confirmation of the end of the triangle, it is curious that the advance stopped right at another structural trend line that can be drawn as a near parallel to the bottom line of the triangle, as shown in the following chart by the orange line. We have to see whether BTC will push ETH beyond the new trend line, or whether it will stop there again to mark the end of the updated position of wave D.

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The fictitious trend line was just that, trying to deceive.

The script has been working out well overnight, with the D-wave in BTC developing at a steady pace, ETHUSD has been pushing to new summer highs, about 3560 so far, for over 5% in a 24-hour period.

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Chart update: