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After an incredible rally that has put Ethereum on the path to possible new all-time highs, the altcoin is now facing something that could hinder its newfound path. This comes down to a CME gap that had formed on its way up, and historically, CME gaps tend to be filled before there is a bullish continuation. In this case, the CME gap is sitting almost 15% below its current price, and could mean that ETH is in for a crash.
The CME Gap Waiting At $4,080
A crypto analyst has pointed out that the Ethereum price could be facing heavy resistance after rallying to levels not seen since 2021. There is also the formation of a CME gap that threatens to drag the price back down before the bullish rally can continue.
The first of these is the resistance that is currently forming at around the $4,868 zone. This is the previous all-time high levels, so naturally, bears are beginning to mount pressure at this point that could ultimately lead to a price rejection. There is also a potential reversal zone skirting around the $4,680 area as well.
The CME Gap is sitting very low at the $4,185-$4,080, suggesting that the price could retrace to this level to close the gap. If this happens, then late long positions could be trapped as the correction plays out, before reversing toward its all-time high levels once more.
Interestingly, the analyst also points out the fact that the Ethereum price seems to be playing out the Elliot Wave Theory. According to the analysis, Ethereum is actually playing out a microwave 5 in the meantime. What this suggests is that the current uptrend is only the start, and that the main Wave 5 is yet to begin.
Using the Elliot Wave Theory, Wave 5 is expected to be the final wave before the bear market. However, it is a major wave that has historically led to new all-time highs. If the bullish momentum does continue, then Ethereum could end up crossing the $5,000 level in quick succession.
There is also the possibility of a deeper correction if bulls fail to maintain control above $4,000. The analyst points out that another CME gap is left to be filled as low as $3,417-$3,461. But if the price is able to cross toward $4,800, this would be invalidated.
