Ethereum Historical Indicator Flashes Long-Term Buy Signal – Is History Repeating?

Ethereum has been struggling to break above the $2,800 mark, facing resistance that has kept it from starting a recovery rally. This level is seen as a significant barrier for bulls, and the price consolidation below it has intensified bearish sentiment in the market. Many analysts predict a continuation of the downtrend, leading to doubts among investors who previously expected Ethereum to rally alongside Bitcoin this year.

Despite the prevailing bearish outlook, some investors remain optimistic about Ethereum’s potential for a recovery. Crypto analyst Ali Martinez recently highlighted a technical analysis showing that the TD Sequential indicator has flashed a buy signal on Ethereum’s weekly chart. This rare occurrence historically signals the start of a significant trend reversal. Martinez pointed out that whenever this indicator triggers a buy signal on the weekly timeframe, Ethereum tends to experience a strong upward momentum, indicating a potential bullish phase ahead.

As Ethereum continues to hover below the $2,800 resistance, traders and investors are closely monitoring the situation. If history repeats itself and the TD Sequential signal proves accurate, Ethereum could surprise the market with a strong move to higher price levels.

Ethereum Prepares For A Recovery Phase

Ethereum is currently testing critical liquidity below the $3,000 level, a psychologically important price point that analysts believe will determine Ethereum’s performance in the near future. This level has become a battleground between bullish and bearish forces, with market sentiment sharply divided.

While retail investors are losing confidence in a short-term recovery, leading to selling pressure and downward momentum, larger players are seizing the opportunity to accumulate Ethereum at a faster pace, indicating a belief in the asset’s long-term prospects.

Martinez’s technical analysis on X revealed a historical pattern on Ethereum’s weekly chart, showing that each time the TD Sequential indicator has signaled a buy near the lower boundary of Ethereum’s long-term ascending channel, prices have rebounded strongly. This widely used indicator suggests that Ethereum could be approaching a crucial moment.

According to Martinez, a similar setup is emerging as Ethereum consolidates below key resistance levels. If the TD Sequential signal plays out as expected, Ethereum could be gearing up for a strong recovery rally. Reclaiming and holding the $3,000 level as support would be an important step towards reversing the bearish trend and starting a long-term uptrend. The upcoming weeks will be crucial for Ethereum as investors look for signs of a breakout or further decline.

ETH Consolidates Before A Big Move

Ethereum is currently trading at $2,690 after a period of sideways trading and market indecision. The lack of momentum above key resistance levels has left investors uncertain about the short-term direction of ETH, with sentiment divided between bullish recovery and further downside potential.

For Ethereum to initiate a recovery uptrend, bulls need to reclaim the $2,800 mark as support. Breaking above this level would pave the way for a push towards $3,000, confirming a reversal of the downtrend and establishing bullish momentum in the market.

However, if ETH fails to reclaim the $2,800 level, there is a risk of further downside, possibly leading to a retracement towards lower demand zones around $2,500. The next few trading sessions will be crucial as Ethereum’s price action will influence market sentiment and its short-term trajectory.

Featured image from Dall-E, chart from TradingView