Elliott Wave Analysis
Elliott Wave analysis can help us break down the entire rally from 2017 through 2021. The initial impulsive move, which ended at $1.39, marked the first wave of this bullish cycle. From there, the wave II pullback ended at $0.017. The cryptocurrency then resumed higher in wave III towards $2.51, which was followed by the wave IV pullback towards $0.91.
Thanks to the Elliott Wave theory, we know that if there is a momentum divergence between wave III and wave V, our Elliott Wave count has a higher probability of success. The Elliott Wave analysis can be subjective, however if all the EW rules are met, then we can be sure that our Elliott Wave count is accurate.
Wave V is now still in progress and according to the Elliott Wave rules there are three ways to find a possible target of wave V:
1. Wave V can be equal in length to the first wave. In this case, wave V should have ended at $2.30 and developed a truncated wave 5, which we already surpassed.
2. Wave V’s target can also be the 61.8% Fibonacci extension of the first and third wave combined, measured against the low in wave IV. In this case, wave V should have ended at $2.42, but we already surpassed that target.
3. Wave V’s target can also be between 123.6% and 161.8% inverted extensions of the depth of wave IV. In this case, wave V can end anywhere between $2.89 and $3.50.
In summary, according the Elliott Wave analysis, Cardano can reach a maximum price of $3.50 before seeing a three-wave pullback.
