ETHUSD sees hike and impending fall to broken resistance

According to the Elliott Wave Theory, which identifies patterns in price movements, Ethereum is currently in the final phase of its uptrend. Once this phase concludes, two downward corrective waves are expected to follow.

Meanwhile, the RSI oscillator is flashing a strong bearish divergence, evident from the sharp contrast between the rising quote trajectory and falling indicator values.

Short positions on ETHUSD at Binance have surged by 40% over the past week and by 500% since November 2024. The market is now primed for a short squeeze, which could trigger a parabolic rally in Ethereum, thus marking the peak of the third wave. Although exact price targets are difficult to pinpoint, the momentum from a short squeeze could propel ETHUSD beyond its previous high of $4,870, pushing it into uncharted territory. Regardless of how high the price climbs, the upward impulse will eventually exhaust itself, likely leading to a retracement toward the former resistance zone of $3,950–$4,115. Traders and investors should be patient and wait for clear signals that the uptrend is weakening, and a reversal is underway.

The overall recommendation is to sell ETHUSD from the $4,870–$5,000 range. 

Profits are taken at the level of $4,000 per coin. Stop loss is set at $6,000. 

The volume of your open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance doesn’t allow opening a position of this size, it’s better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.