Is Ethereum about to embark on a large correction back to around $1300?

Using the Elliott Wave Principle (EWP), I count the 2017 high in ETH as a (blue) Primary-I/A, the 2018 low as Primary-II/B, and the current rally Primary-III/C. See figure 1 below. Although I prefer the five-wave impulse count because ETH has always had impulse patterns to the upside, I must admit that at this stage, I do not know if ETH will only do three large waves up (blue A, B, C) or five (blue I, II, III, IV, V). The market will eventually tell us. Regardless, either pattern is still looking higher (think $3000+) after a pending more extensive correction: (black) major-4.

Figure 1. ETH Weekly chart with technical indicators and horizontal support/resistance levels.

The Elliott Wave Principle points to the next more extensive correction.

ETH experienced a rough first two weeks in 2021, as the instrument went through the (red) intermediate-iv correction. It bottomed right in the ideal target zone (red square), which outlines a typical 23.60-38.20% retrace of the prior entire intermediate-iii wave. That $912 low on January 11 was a ~32% correction. Classic! Since then, it has moved impulsively higher, i.e., in a five-waves-up-three-waves-down fashion, and should now complete intermediate-v, as per the anticipated red path. All of this I had already outlined to my Crypto Trading Members in December. Hence, no surprises so far.

Now I anticipate the black path to unfold, also because negative divergences (red dotted arrows) are setting up on several technical indicators (RSI5 and MFI14), which often foretell a correction. The smaller wave-count, not shown here but available to my Premium Members, suggests ETH should soon top around $2000+/-100 and then embark on a move down to about $1300 before moving back up to ~$3000.

A correction of the major-wave degree to $1300 would be a 35% correction and fit with the prior intermediate wave-degree. As shown in Figure 1, the major-4 correction during the 2017 rally retraced almost 70%, which would translate to around $600 (!) for current conditions. However, the recent rally is more Bullish than the 2017 rally, and in Bull markets, the downside often disappoints and upside surprises. I do not expect such a deep retrace, and for now, I focus on $1300+/-100. A weekly close below it would target $900 once again and be a sizable 55% correction.

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