key takeaways
- Ethereum is currently presenting a sell signal on the daily chart.
- The bearish formation was formed after ETH rose 40%.
- An increase in profit booking could push ETH towards the $1,300 support level.
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Ethereum could be on the verge of a significant correction after the market cap gained over 400 points in the past week. Nevertheless, on-chain data shows that ETH is holding a stable support level.
ethereum sell flash signal
Ethereum appears to be trading in an overbought zone, which could result in a significant increase in profit margins.
The number two cryptocurrency is up almost 40% over the past week. It rose from a low of $1,180 on July 15 to a high of $1,650 today. However, the bullish price action of ETH seems to be weakening as the technicals are showing signs of exhaustion.
The Tom DeMark (TD) Sequential Indicator has presented a sell signal on the daily chart of Ethereum. The bearish formation developed in the form of a green nine candlestick. Increasing selling pressure could validate the pessimistic outlook and lead to a one to four daily candlestick correction.
The trading history shows that Ethereum has formed a significant demand wall at $1,550. Over 586,000 addresses had previously bought around 5.1 million ETH around this price level. Therefore, the bearish thesis can be validated if investors have booked profits, potentially sending ETH below the $1,550 support barrier.
Failure to hold above this important demand zone could result in a 15% correction towards the 50-day SMA near $1,300.
Ethereum may need to print a decisive close above $1,650 to potentially invalidate the bearish thesis. A break above this resistance could help the price move towards the next important hurdle, $1,800, where 1.14 million addresses are currently holding over 800,000 ETH.
Disclosure: At the time of writing, the author of this feature held BTC and ETH.
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