Bitcoin’s (BTCprice saw one significant correction of 28% from $ 41,000 to $ 30,000 during the week. At the same time Ether (ETH) also saw a 32% decline. The recent high for ETH / USD was $ 1,350 – or about $ 70 shy of its all-time high – while the recent low was $ 910.
January has seen heavy volatility in the crypto markets. Sentiment has turned from euphoria to depression and back again. However, the market is still in a bull market even if a correction occurs again.
In that regard, it is only a matter of time before a new record is made for Ether, in the footsteps of Bitcoin.
Healthy correction for ETH
Ether corrected to the first level of interest at the 0.35–0.382 Fibonacci level. Traders often use this Fibonacci level to anticipate corrections.
Often times, corrections only take place at the 0.35–0.382 Fibonacci level or the 0.5 Fibonacci level.
This happened in the case of ETH as the USD 850 to USD 925 area merges with an earlier resistance point. This resistance point was found in 2018 during the multi-monthly rally from $ 350 to $ 900. This slight run-up became the last bounce before the market tipped south.
But now the USD 900 region has turned the support, meaning there is more upside potential. As often stated, it may be worth investigating if an asset is down 30% in an uptrend.
Levels to watch after the highest point has ever been broken
When the correction is finished, it will likely continue with another impulse wave. In that regard, ETH / USD would be looking at new highs, which can also be determined using the Fibonacci extension tool.
Critical to continuation would be a breakout above the recent high of USD 1,350. Personally, I would expect a bit more consolidation before moving on, but there is certainly a fresh impetus wave on the table.
If such a continuation of the impulse wave occurs, the following targets are found at the recent all-time high of 2017 (about $ 1,420), as well as at $ 1,600 to $ 1,650 and $ 2,050 to $ 2,100. The latter targets are constructed using the Fibonacci extension tool.
Sideways action is even more likely in the short term
Lower timeframes still exhibit range-bound construction. Momentum is likely to be very volatile and markets fluctuate in double digits on a daily basis.
However, the range-high resistance is at $ 1,225 to $ 1,275 and that needs to break in order for the bullish momentum to continue.
If not, Ether will most likely see sideways action. In that regard, a retest of the $ 900 area is still on the table. In the past week, market sentiment turned to fear very quickly. So one rejection at the next big resistance and the market can undergo another correction.
The power comes later in the year from the ETH / BTC pair
Slowly but surely, altcoin-BTC pairs should catch up, but Bitcoin needs to stabilize for that to happen.
Currently, ETH / BTC is making higher lows and flipping previous resistance levels for support. This flip too happened with the 0.025 sats level and served as a signal for greater benefit. As the ETH / BTC chart shows, compression is increasing, suggesting a big step is underway.
Most likely it will take some time and is expected later in 2021. But once the BTC pair starts to accelerate, Ether can go up to 0.056 to 0.08 sats. Of course, this would also mean new all-time highs in US dollars.
The views and opinions expressed here are solely those of the writer and do not necessarily reflect Cointelegraph’s opinion. Every investment and every trade move carries risks. You should do your own research when making a decision.
