- Ethereum (ETH) trades inside an ascending parallel channel.
- Ethereum has consolidated in a very tight range since May 12.
- When and how will Ethereum’s tight range resolve?
Ethereum fell 66% since December 2024, reaching a low of $1,383 on April 9, 2025.
An over 100% increase followed until June when Ethereum finally outperformed Bitcoin.
However, the possibility of another decline looms if ETH closes below its channel’s support trend line.
Ethereum Consolidates in Channel
The daily time frame price analysis shows that Ethereum increased by nearly 110% between April 9 and June 12.
However, the ETH price fell after reaching a high of $2,880, confirming a deviation above the 0.5 Fibonacci retracement resistance level (black circle).
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Today, the ETH price trades at an ascending parallel channel’s 38-day-old support trend line.
Such channels usually contain corrective movements, meaning an eventual breakdown is likely.
Ethereum trades in the channel’s lower portion, making this possibility even more plausible.
Additionally, technical indicators are bearish. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are falling.
The RSI is below 50 while the MACD is negative, both signs of a bearish trend.
Therefore, the daily time frame analysis suggests Ethereum’s price will break down from the channel.
Ethereum Breakdown Incoming
Ethereum’s wave count supports the bearish prediction from the price action.
The wave count shows a completed five-wave upward movement since April with an extended wave three.
Waves one and five had the same length, giving more credence that this is the correct count.
If so, Ethereum has started an A-B-C correction that will cause a breakdown from the channel.
Ultimately, Ethereum can settle between the 0.5-0.618 Fibonacci retracement support levels at $1,956-$2,132 before moving to new highs.
Ethereum Volatility Incoming
Ethereum has consolidated in a tight range without volatility in May.
The wave count and price action suggest a breakdown is likely.
If one occurs, ETH could find support between $1,956-$2,132 before bouncing.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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