Ethereum faces sell signal risk, key supports at $1,770 and $1,700 in focus

Ethereum is currently approaching major resistance levels as technical signals indicate a heightened risk of further downside. The TD Sequential indicator, often used by traders to identify potential trend reversals, has flashed a sell signal as ETH tests the upper boundary of its price channel.

Technical Analysis: Sell Signal and Resistance Levels

According to Ali Charts, a crypto market analyst, Ethereum’s latest rally is encountering resistance at the channel top. Past attempts to break through this area have repeatedly failed, leading to subsequent price declines. The TD Sequential signal adds to concerns, suggesting that the current upward move is running out of momentum after a sustained rise.

If Ethereum fails to overcome the resistance and confirms the sell signal, immediate support is seen near $1,770. Market participants view this level as the first area where buyers could attempt to halt further losses. A break below this support would likely shift the focus to $1,700, the next significant target for potential downside in the short term.

So far, the sell signal requires confirmation via a clear rejection from resistance and follow-through in price action. A decisive move above the channel would negate the corrective outlook, signaling that buyers retain control. However, if ETH cannot sustain gains beyond the channel, further losses may be likely.

Ali Charts underscored the risk: “If the upward move fails to hold, ETH could first sweep liquidity above recent highs but may turn lower toward $1,770 and $1,700, eventually even $1,505.”

Short-Term Structure and Key Targets

On the 12-hour timeframe, Ethereum’s recovery from late June appears strong, but the broader market structure suggests the possibility of one more move lower. Analyst TraderJBx observed that ETH might temporarily move above its recent highs to attract buyers but could eventually reverse back toward support around $1,505, an area marked by so-called “equal lows.”

Short-term charts show a five-wave advance from the recent bottom. This setup typically favors continued gains after a corrective pullback. Under such a scenario, Ethereum could dip back to the $1,700-$1,760 range before resuming its climb above $2,000.

However, the wider trend remains more cautious. The lows recorded on June 6 and June 26 occurred at almost the same price, with surrounding moves forming classic corrective patterns, increasing the probability of an inverted flat correction. If this pattern plays out, ETH could make a brief move above $1,850, attracting late buyers, before rebounding back down.

A sustained rally above $2,000 would help negate the bearish scenario and could support a larger relief rally. Until Ethereum closes decisively above this threshold, analysts remain cautious, viewing the current advance as a potential liquidity move instead of the beginning of a confirmed upward trend.

Mini dictionary: TD Sequential is a technical indicator developed by Tom Demark that aims to identify the exact time of trend exhaustion and potential price reversals by analyzing a series of consecutive closes higher or lower.

TraderJBx noted that while short-term charts support further upside after a pullback, the broader structure points to a possible reversal if Ethereum fails to make a sustained breakout above key resistance areas.