Ethereum’s price has recently come under heavy selling pressure, falling from 2,300 dollars to the 1,600 dollar mark. Following this steep decline, the TD Sequential indicator on the three-day chart has flashed a “9” buy signal. This technical pattern hints that the downward momentum may be showing signs of exhaustion at current levels.
Technical signals highlight the 1,600 dollar area
Throughout this period of weakness in the market, Ethereum has consistently set lower highs and lower lows. The nearly 30 percent retreat unfolded amid an overall bearish mood in the cryptocurrency market. Despite the gloomy sentiment, the latest technical signal has revived short-term hopes for a potential relief rally.
The TD Sequential indicator works off sequences of nine consecutive candles that close lower than the four preceding ones. Once the count reaches nine, traders understand that the prevailing trend may be losing momentum.
Mini glossary: TD Sequential is a technical analysis tool used to spot whether strong uptrends or downtrends are running out of steam. It doesn’t provide a definite signal for trend reversal on its own; traders usually seek confirmation from following candles.
Analyst Ali Charts noted that a TD Sequential buy signal has appeared on Ethereum’s chart, quickly followed by a small bullish candle.
According to Ali Charts, if buyers can defend the 1,600 dollar support level, Ethereum’s next recovery zone could stretch between 1,800 and 1,950 dollars. However, if this support fails, the broader downtrend could accelerate once again.
Ethereum reserves on exchanges continue to shrink
Alongside the technical setup, on chain data has also grabbed attention. Referencing CryptoQuant’s figures, Rei Researcher signaled that total Ethereum reserves on centralized exchanges have resumed their decline after a brief uptick. CryptoQuant is known as a leading provider of on chain market analytics.
Rei Researcher highlighted that much of the current data reflects investors’ preference to hold their assets at these price levels, rather than selling.
Decreasing reserves on exchanges can signal a tightening in readily available supply on order books. When investors withdraw their ETH from exchanges to personal wallets, this can help ease short term selling pressure.
The pronounced outflow trend has reinforced the technical and on chain significance of the 1,600 dollar support level. Still, whether any potential rebound will prove sustainable depends on broader market conditions as well as the ongoing appetite of buyers at this price point.
