Potential Rally in FETCH.AI FET - Technical Analysis and Price Prediction
Table of Contents
- Introduction
- Analysis of the Price Action
- Overall Bullish Scenario
- Fibonacci Support Areas
- Structure Requirement for Confirmation
- Direct Breakout Scenario
- Uncertainty in the Market
- WXY Structure Explanation
- Confirmation Levels in Elliott Wave
- Focus on Higher Levels
Analysis of the Price Action
In this update video, we will be discussing the recent price action of Fet (Fetch.AI) and analyzing its potential future direction. The price has shown some significant upward movement, mainly driven by Bitcoin. However, it is essential to note that the Current price action is still in three waves, and we would ideally like to see one more high to confirm the structure. Despite this, the situation is less immediately bearish than anticipated.
Overall Bullish Scenario
To put things into Context, we have been tracking an overall bullish scenario for Fet. As long as the price holds above the 17.5 cent level, there is a reasonable chance for a third wave rally. We observe whether another low occurs or not. If the price does not break below the support level, there are still chances for a rally in a third wave. However, if the price falls below the 17.5 cent level, we can expect a decline to the 12 cent level, which is the 88.7% retracement level.
Fibonacci Support Areas
It is important to consider the Fibonacci support areas when analyzing the potential for a third wave rally. The highlighted support areas indicate the possibilities for a rally. A break below the 17.5 cent level would most likely lead to a further decline to 12 cents. Therefore, there is a good chance for a turnaround, but a confirmed structure is necessary.
Structure Requirement for Confirmation
To confirm a bullish trend, we need to see a specific structure in the price action. Ideally, an impulse wave would be observed, which requires five waves up. Currently, we only have three waves up, indicating the need for two more highs. In a previous video, the 22.6 cent level was discussed as a key resistance level. If the price breaks above this level, we would consider a direct breakout scenario. However, it is important to note that bearish structures can still experience strong rallies in the short term. The uncertainty in the market makes it a wait-and-see situation.
Direct Breakout Scenario
If the price manages to break above the resistance at 28.9 cents, it would confirm a direct breakout scenario. However, at the moment, we only have three waves up, which falls short of the required structure. Therefore, it is crucial to await further confirmation. Elliott wave theory provides three levels of confirmation for a trend shift. The first level is a five-wave move up, followed by an ABC structure forming a higher low. Finally, the price needs to break above the first five waves up for a confirming trend shift.
Uncertainty in the Market
Due to the extended correction period, it is challenging to determine the exact bottom of the price action. Without reaching the first level of confirmation, it is premature to state that we have bottomed out. However, we can highlight important levels against which the focus should be on higher prices. A potential diagonal structure could see the price go as low as 21.3 cents, but ideally, it should not break below the 17.5 cent level. The focus should be on holding above the 20.4 cent level for at least one more high in a possible wave one.
WXY Structure Explanation
The current price action can be counted as a wxy structure, where the three waves make up the wave W, X, and Y. To ensure a reliable structure, we need to see one more high to complete a five-wave move. This would result in an ideal structure of a third, fourth, and fifth wave. Alternatively, if the price follows a diagonal structure, only one more high would be sufficient. However, the current three-wave move does not Align with the desired structure and requires further observation.
Confirmation Levels in Elliott Wave
Confirmation levels play a significant role in assessing whether a trend has shifted. In Elliott wave theory, the structure is more important than the percentage price change. The first confirmation level is a five-wave move up, indicating a potential trend shift. This is followed by an ABC structure forming a higher low, further validating the shift. Finally, breaking above the first five waves up provides the third and final confirmation that the trend has shifted.
Focus on Higher Levels
In conclusion, the analysis of Fet's price action suggests that higher levels are still possible, given the current structure. However, it is crucial to await confirmation through additional highs and a strong structure. The market remains uncertain, and the price action can substantially vary, even in corrective structures. The focus should be on the overall structure rather than the percentage price change to determine the true direction of the trend.