Yesterday saw another very bad day in the markets with the total market cap dropping to $191 billion at the time of writing and with Ethereum fairing especially badly.
The price of Ethereum dropped yesterday by 19.23% from last Friday’s high at 362$ to 293$ breaking key support 337$ along the way. As of 14th August It now stands at $264.
Zooming out to the daily chart we can see the level’s significance.
This horizontal level was considered as strong support as that level was the level from which the all-time high was made to 1380$ after a breakout a served as strong resistance before. Currently, the price is looking for support and it looks like it found some on the next minor horizontal range, but the momentum behind the weekends sell-off is massive and I don’t believe that this support is going to hold for much longer.
The next support level I do see strong enough to hold the momentum is at 221.68$ but the path to it won’t necessarily be in a straight line as sellers may exhaust their supply. My Elliott Wave count has pointed an even lower target for the end of this correction.
Judging by the position of the X wave at 0.5 Fibonacci retracement level this could end up as a WXY correction and if that happens then the potential target of the Y wave would be at 103$ level from where the price broke out the prior time the all-time high was made at 388$, and since we are now beyond those level this horizontal support is the most probable target for the end of correction.
As I am writing this the price of Ethereum has continued to drop and has fallen below 290$. Zooming out to the hourly chart we can see that the first target is definitely at the 221$ level.
As the price impulsively broke out from the bearish pennant the first wave reached the 0 Fibo level, 2 wave was a recovery above it and the current wave 3 which is usually the longest and the strongest pushed the price significantly lower and is still developing.
The current minor 12345 move is the wave 3 from the primary count of the corrective wave Y. After this current wave ends I would be expecting a short-lived recovery potentially back to retest the 337$ support where it would find resistance and be rejected.
Technically speaking the price could go up to 495$ and the count and the target would still be valid as wave 4 cant overlap with the wave 1 which ended there, but that is highly unlikely although a possibility to have in mind.