Ethereum (ETH/USD) is finally making a bullish breakout. The previous bullish swing was 3 years ago when price action went above $1,300.

The pullback and correction was strong and lengthy. Can the ETH/USD bulls really wrestle back full control from the bears?

The ETH/USD continued higher over the weekend crossing the round $500 mark. The new high is also breaking above the -61.8% Fibonacci target. This is a typical target for a wave C so a break indicates that a wave 3 is becoming more likely.

The next confirmation of a wave 3 occurs if price action is able to break above the -100% Fibonacci target. A bull flag could develop as well (orange arrows) but eventually a breakout is expected (green arrows).

On the 4 hour chart, the bullish momentum remains strong. Price action seems to be in a wave 3 (grey). Once this wave 3 is completed, we are expecting a wave 4 correction. Usually wave 4s are long and choppy (orange arrows) like a bull flag continuation chart pattern.

A break below the top of wave 1 (green box) invalidates (red circle) the 5 wave pattern (grey). But it does not invalidate the entire uptrend due to the expected support at the long-term moving averages.

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

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Ethereum First Break Above $500 After 2.5 Years - FX Empire