Illuvium (ILV) Shows Signs of a Potential Reversal, Targeting $38.42

ILV has been in a prolonged downtrend, but recent price action suggests a potential reversal may be forming.

Illuvium (ILV) has been enchained in a multi-month downtrend, but recent price action suggests that this gloomy chapter may be nearing its end, potentially setting the stage for a remarkable reversal.

As we zoom into the daily chart (Chart 1), we observe that a complex correction is fully formed, converging with the 1-hour timeframe, which, in turn, suggests an emerging bullish impulse. The fate of this unfolding story hinges on whether Illuvium can manage to breakout from crucial key resistance zones in the coming days.

Illuvium Price Analysis

Illuvium (ILV) has been battered throughout the past multi-months as it forms a descending wedge structure on lower highs and lower lows. However, recent price action suggests that this gloomy chapter may be nearing its end, potentially setting the stage for a remarkable reversal.

As we zoom into the daily chart (Chart 1), we observe that a complex correction, (i)-(iii)-(v) of W-X-Y, is fully formed and converges beautifully with the 1-hour timeframe, which, in turn, suggests that we are witnessing the emergence of a new bullish impulse, (i) of 1.

The fate of this unfolding story hinges on whether Illuvium can manage to breakout from crucial key resistance zones in the coming days or ultimately fails to hold the current support, leading to a deeper decline.

Chart 1

The Elliott Wave count suggests that a W-X-Y correction is in its final stages, with the last leg (Y) approaching exhaustion near the all-time low of $12.88. This price zone is also significant as it coincides with the Relative Strength Index (RSI) reaching oversold conditions, indicating that the selling momentum might be slowing down.

The RSI has been persistently below the 40 mark for an extended period, a condition typically associated with strong selling pressure. However, it's crucial to note that throughout Illuvium's history, whenever the RSI remained oversold for an extended time, it was later followed by a substantial rebound in the cryptocurrency’s price.

Key resistance is at $38.42, where prior corrective waves failed to sustain upward momentum. This zone also coincides with the descending trendline, rendering it a critical breakout point.

If Illuvium can manage to reclaim the $24.35 level and close above it, it could signal the beginning of a larger reversal wave, targeting $38.42 and potentially $72.12.

If the price fails to hold the current levels and breaks below $12.88, the bearish scenario remains intact, and a deeper decline toward $8.00-$10.00 could follow.

Chart 2

The 1-hour chart (Chart 2) indicates that Illuvium may have completed its five-wave decline, with wave (v) of the final corrective structure nearing exhaustion. The price has shown initial signs of bottoming, potentially setting the stage for a near-term recovery.

As the lower timeframe dives deeper into the 1-hour chart, we can observe that the Relative Strength Index (RSI) is showing bullish divergence, which is a classic technical indicator that suggests the current downtrend might be nearing its end and a reversal could be unfolding.

This divergence is especially noteworthy as it occurs at the same time as the RSI is in oversold territory, which could lead to a relief rally.

A short-term impulse could follow with wave (i) breaking the structure and wave (ii) forming a corrective retracement. If Illuvium sustains above $14.00, it may confirm the beginning of a new impulsive move. A successful breakout above $16.00 would add further confirmation.

The first major target for a bullish move is $24.35, which aligns with prior structure as a horizontal resistance point. A pullback from this region would be expected before continuation toward $38.42.

In the bearish case, failure to hold above $12.88 could result in an extended corrective phase, delaying a bullish reversal. The RSI needs to remain above 40 to support upward momentum, as a drop below could indicate weakness.

If wave (iii) extends properly, we can expect the price to reach the $38.00-$40.00 range in the medium term as the final levels for wave (v), confirming a reversal structure.