Analyst Predicts Ethereum Surge to $11,000 Amid Historic Short Interest

• Ethereum’s price follows an expanding diagonal, signaling a potential wave V rally if key support holds.
• High short interest may trigger a squeeze, pushing ETH toward $11,000 before a possible major correction.
• Elliott Wave analysis suggests a bullish trend, but traders should watch for a reversal after wave V completes.

Tony “The Bull” Severino, a Chartered Market Technician (CMT), recently shared his outlook on Ethereum (ETH). His analysis suggests an Ending Expanding Diagonal pattern is forming. ETH has struggled to show impulsive strength since the LUNA collapse. Instead, it appears to be following a corrective wave structure, even during upward movements.

ETH’s Price Action and Wave Structure

Severino highlights Ethereum’s movement within an ascending channel. The price has maintained a positive trend by making higher highs and higher lows. After a corrective phase in wave IV that ended around mid-2022, the Elliott Wave count indicates that ETH is in wave V.

Wave 1 established a higher high, followed by an ABC correction into wave 2. Then, wave 3 peaked before another ABC correction into wave 4. The price has respected the trend channel, reinforcing the upward trajectory.

Short Squeeze Potential and Market Sentiment

ETH shorts are at historically high levels, and sentiment remains bearish. However, such conditions often create the perfect environment for a short squeeze. If the lower trendline holds, Ethereum could see a rapid bounce to $11,000.

Severino suggests that this potential rally could convince market participants that a long-term bull run is underway. However, this could merely be a final wave before a significant correction.

Using Fibonacci-based wave projections, Ethereum’s price movement aligns with an expanding diagonal structure. The broader trend remains bullish as long as ETH stays above key support levels.

The Elliott Wave structure indicates wave V could reach new highs before a potential reversal. Market participants closely observe corrections and impulsive movements to validate the ongoing trend.