Ethereum’s price has been on the rise since hitting a low on December 20, but the rally thus far appears to be more of a corrective move than an impulsive uptrend. The market hasn’t yet displayed enough momentum to confirm a strong upward trend, but this could change as the price action evolves. As of now, two main scenarios are emerging for Ethereum’s price in the coming weeks.

Scenario 1: Corrective Rally (B-Wave Correction)

In the first scenario, Ethereum could be in the midst of a broader B-wave correction. According to Elliott Wave Theory, the downtrend from December 6 to December 20 is considered the completion of Wave A. The subsequent upward movement could be part of Wave B, which might take the form of either an ABC or WXY structure. The WXY pattern is particularly common in the volatile crypto market.

For this scenario, Ethereum’s price would likely continue to rise until the B-wave reaches its peak. Once the upward movement concludes, it could be followed by a C-wave correction, signaling the start of a bearish phase. In this case, key levels would need to break for the bearish phase to begin. A critical support zone would lie between $3515 and $3593, with a drop below these levels confirming that the rally has run its course and a downward move has started.

Key Resistance and Support Levels

• Resistance Levels: $3550 (previous swing high)
• Support Levels: $3593 (recent low), $3515–$3575 (micro support zone)

A break below the recent low at $3593 and the support zone at $3515 would serve as confirmation that the corrective rally has ended.

Scenario 2: Bullish Outlook (New All-Time Highs)

Alternatively, Ethereum might be following a more bullish trajectory, potentially setting the stage for a new all-time high. In this case, the bottom formed around December 20 could mark the conclusion of a wave two correction, and Ethereum might be poised to push higher.

However, while Ethereum’s current upward movement appears promising, it still lacks the impulsive characteristics typically seen during a third wave in Elliott Wave analysis. If Ethereum’s price breaks above the $3800-$3880 zone, it could provide further evidence of an impending bullish continuation. Nevertheless, a brief pullback might occur before the rally resumes.

Key Levels to Watch

• Support Levels: $3593 and $3515–$3575 (micro support zone)
• Resistance Levels: $3808 and $3880 (potential resistance zone)

If Ethereum successfully breaks through the $3800-$3880 range, the bullish scenario would gain strength, potentially setting up for a surge that could lead to new all-time highs.

Trend Confirmation: Bearish Outlook Trigger

For either scenario, the trend’s future direction depends heavily on key support levels. A decisive break below the trend channel or the critical 78.6% Fibonacci retracement level at $2400 would indicate a shift toward a bearish outlook for Ethereum.

Currently, Ethereum is in a delicate balance between bullish and bearish momentum, and its price action over the next few days could provide further clarity on its next major move. Investors and traders should monitor these key support and resistance levels closely, as they will offer important insights into whether the market favors a corrective downturn or a breakout to new highs.

In conclusion, while the upward movement in Ethereum may not yet signal a definitive trend reversal, the key levels outlined above could provide crucial information in the coming days, helping to determine whether Ethereum continues to climb toward new all-time highs or faces a potential retracement.

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