Ethereum has seen a Tom Demark (TD) Sequential sell signal on its weekly chart, something that last led to a major drawdown for the asset.
Ethereum Has Seen A TD Sequential Sell SignalIt involves two phases: the setup and countdown. In the context of the current discussion, the former phase is the one of interest. During the setup, the TD Sequential counts up candles of the same color until the number hits nine. Once the nine candles are in, the indicator signals the exhaustion of the prevailing trend.
Below is the chart shared by Martinez that shows the TD Sequential setup that has appeared on the weekly Ethereum price.
As is visible in the graph, the TD Sequential has seen a setup complete with nine green candles recently, a potential sign that the bullish trend may be about to reverse for ETH.
According to the analyst, the indicator has generally been reliable for ETH during the past year. “Every signal it has flashed on the weekly timeframe has been validated by significant price action,” noted Martinez.
In April and June of last year, the indicator flashed buy signals that led into price surges of 86% and 134%, respectively. Similarly, the August sell signal resulted in a drawdown of 63%.
Given that Ethereum has just once again seen a TD Sequential sell signal on the weekly, the pattern could follow this time as well. “To me, this suggests Ethereum is entering another corrective phase,” said the analyst.
The Parallel Channel is a TA pattern that forms whenever an asset trades between two parallel trendlines. The upper line acts as a source of resistance, while the lower one that of support.
From the below chart, it’s apparent that Ethereum has recently been trading in the lower half of a long-term Parallel Channel on the weekly timeframe.
“$1,071, at the bottom of the channel, looks like a strong area to buy Ethereum $ETH,” noted Martinez. It now remains to be seen whether the asset will have to rely on this support level.
ETH PriceEthereum has gone down this week as its price is now trading around $2,220.
