As the crypto market experiences a relief rally following a recent downturn, Ethereum (ETH) stands at a critical juncture.
On-chain indicators suggest a significant price movement is on the horizon for Ethereum. Analyst Ali Martinez recently pointed out key trends in Ethereum’s price history, utilizing the TD Sequential setup to predict potential outcomes for the second-largest cryptocurrency.
Martinez noted that Ethereum has exhibited a consistent pattern over the past two market cycles. Each time the price breaks above the TD setup resistance trendline (marked in red on the accompanying chart), ETH typically enters a strong bull run. Previous breakouts resulted in remarkable surges of 8,885% during the 2017/2018 cycle and 1,462% in the 2020/2021 cycle, both times reaching new all-time highs. A similar bullish trend occurred in Q1 2024, when Ethereum rose from approximately $1,400 to over $4,000, though it did not set a new cycle peak.
However, it’s crucial to consider the downside. Whenever ETH breaks below the TD setup support trendline (in green), a sharp correction usually follows, averaging around 53%. Historical data shows Ethereum has faced three major corrections after losing support, with declines of 56.67%, 54.43%, and 51.41%.
Currently, Ethereum is hovering near the $2,250 support level. Martinez cautioned that if ETH fails to hold above this mark, the market could witness another significant drop reminiscent of past corrections.
This support level is particularly critical as it coincides with a substantial number of investors entering the market. According to IntoTheBlock, 2.4 million addresses purchased ETH between $2,268 and $2,340, holding a total of 52.59 million ETH tokens. Martinez emphasized that if this demand zone fails, it could lead to a sell-off as investors attempt to minimize losses. The potential price drop could be severe, given that fewer addresses have acquired ETH at other levels, weakening support against heavy selling pressure.
As of now, Ethereum’s market position has slightly improved, trading at $2,425, up 1.655% in the past day.