A Tom Demark (TD) Sequential sell signal has emerged on Ethereum's weekly chart, a pattern the analyst Ali Martinez highlighted on X. The indicator last flashed before the asset suffered a major drawdown of 63%, according to Martinez's analysis. Ethereum's price has recently dipped to $2,250 amid elevated trader profit-taking, per related data.
The TD Sequential is a technical analysis tool designed to spot trend exhaustion by counting consecutive candles of the same color. A completed setup of nine green candles suggests the prevailing bullish momentum may be weakening. This signal does not guarantee a decline but serves as a caution for traders watching for reversals.
Ethereum's price action has been volatile, with the asset recently hitting $2,250 as profit-taking reached a three-week high. The TD Sequential setup has now completed with nine green weekly candles, mirroring the configuration that preceded the prior 63% drop. The accuracy of such signals can vary, and market conditions differ.
If the sell signal proves valid, Ethereum could face significant downside pressure, impacting investor portfolios and the broader crypto market. Traders may adjust positions, potentially increasing selling volume. However, the crypto market is influenced by many factors beyond single indicators.
The analyst's warning comes amid mixed sentiment, as some market participants view the signal as one of many tools rather than a definitive predictor. Other analysts may argue that fundamental factors like network upgrades or adoption trends could offset technical signals.