The recent sharp pullback in the cryptocurrency market has dragged down Ethereum (ETH) as well. However, the price structure of the sell-off from the all-time high of $4,951 is unfolding in 3 waves, which is corrective in nature.

3 Wave Correction

Typically, all sharp pullbacks tend to happen in 3 waves (ABC pattern). The first sell-off usually is the most violent and volatile one. In wave A, ETH price crashed more than 32% towards the $3,333 low. Then, the wave B relief rally followed towards a $4,505 high.

Currently, the ABC pattern's last wave, wave C, is unfolding and can be completed between the 1% and 1.272% Fibonacci extension levels of wave A against wave B. As a result, the price range falls between $2,887 and $2,447, from where the ETH price can bounce.

The ETH price has also fallen below the critical 200-day simple moving average, so the bulls need to reclaim it to turn the bearish tie.

Additionally, the RSI momentum reading is at the lowest level since March 2020. The low reading indicates extreme oversold conditions. However, the RSI oscillator can remain in oversold reading until the ABC pattern satisfies its Fibonacci extension requirements.