Ethereum is at risk of a steep correction as the technicals anticipate a spike in selling pressure.
- Ethereum is currently presenting a sell signal on the daily chart.
- The bearish formation comes after ETH rallied 40%.
- A spike in profit-taking could push ETH to the $1,300 support level.
Ethereum could be on the verge of a significant correction after gaining more than 400 points in market value over the past week. Still, on-chain data shows that ETH is sitting on a stable support level.
Ethereum Flashes Sell Signal
Ethereum appears to be trading in overbought territory, which could result in a significant spike in profit-taking.
The number two cryptocurrency has surged by nearly 40% over the past week. It rallied from a low of $1,180 on July 15 to hit a high of $1,650 today. However, ETH’s bullish price action appears to be weakening as the technical shows signs of exhaustion.
The Tom DeMark (TD) Sequential indicator has presented a sell signal on Ethereum’s daily chart. The bearish formation developed as a green nine candlestick. Increasing selling pressure could validate the pessimistic outlook and lead to a one to four daily candlestick correction.
Transaction history shows that Ethereum has formed a significant demand wall at $1,550. More than 586,000 addresses had previously purchased nearly 5.1 million ETH around this price level. Therefore, the bearish thesis could be validated if investors booked profits, potentially sending ETH below the $1,550 support barrier.
Failing to hold above this vital demand zone could trigger a 15% correction toward the 50-day moving average at around $1,300.
Ethereum will likely need to print a decisive close above $1,650 to potentially invalidate the bearish thesis. Slicing through this resistance level could help prices surge toward the next significant hurdle at $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 owned BTC and ETH.
For more key market trends, subscribe to our YouTube channel and get weekly updates from our lead bitcoin analyst Nathan Batchelor.
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
Ethereum Freedom and Parisian Psychedelia: Reflections on EthCC
The Ethereum faithful took over Paris for EthCC this week. EthCC Returns to Paris This week, thousands of builders, degens, and other cryptocurrency enthusiasts descended on Paris for the fifth…
Ethereum Will Be “55% Complete” Post-Merge: Vitalik Buterin
Buterin said that Ethereum faces “short-term pain, long-term gain” as it prepares for the Merge and other major changes. Buterin Discusses Ethereum’s Future Ethereum is in a “long and complicated…
Polygon zkEVM Heads to Ethereum Layer 2
Polygon’s new Layer 2 network is set to launch its testnet later this summer ahead of a full mainnet launch in early 2023. Polygon Reveals EVM-Compatible Layer 2 Polygon has…