Ethereum's recent rally, which pushed the price from lows near $1,500 to just under $2,000, now shows signs of faltering. A key technical indicator known as the TD Sequential has flipped from a buy to a sell signal, suggesting that the cryptocurrency might be headed for a pullback soon.
TD Sequential Signals Shift
On July 31, Ali Martinez, a respected on-chain analyst on X, highlighted that the TD Sequential indicator warned about a potential reversal as Ethereum approached $1,980. Interestingly, the same tool triggered the buy signal that marked the start of the 31.5% rally from $1,500 earlier this year. Now, with ETH trading around $1,880 at press time, it has already slipped below the recent support level of $1,897 and threatens to dip further toward $1,875 and potentially $1,857.75.
TD Sequential, developed by Tom DeMark and detailed in his 1994 book, analyzes price momentum to predict if current trends will continue or reverse. Its recent signals have a track record of foretelling Ethereum’s significant moves, making the current warning particularly notable.
Broader Market Context and What’s Next
Despite the bounce, Ethereum remains one of the worst-performing major cryptocurrencies this year. After hitting highs near $3,400 in January, ETH has lost over 36% year-to-date and halved in value over the past 12 months. Compared with Bitcoin, which is down 27% YTD but gained 53% since mid-2021, Ethereum’s struggles stand out.
Looking ahead, the pending CLARITY Act vote expected on August 3 could shake things up for Ethereum and the wider crypto market. This regulatory framework has the potential to introduce clarity and support for the sector, possibly overriding technical signals and influencing price movements.
This article is informational and not financial advice.
