The recent Ethereum rally has rewarded buyers who accumulated near the lows, but the charts are beginning to suggest that momentum may be slowing. Two separate technical indicators are now pointing to a critical development that could determine Ether’s next major move.
The first is the TD Sequential indicator, which has now flashed a sell signal with ETH trading around $1,900. At the same time, Ethereum is retesting a long-term ascending channel after breaking below its lower trendline in June.
TD Sequential Signals Ethereum May Need a Breather
Analyst Ali Martinez noted in an X post that the TD Sequential indicator was remarkably accurate in identifying a major turning point for Ethereum in June. It flashed a buy signal near $1,500 in June. Subsequently, ETH posted a 31.5% recovery, validating the bullish setup.
Now, the indicator is flashing a sell signal on the 3-day timeframe. While this does not automatically signal the start of a major correction, it suggests that upside momentum may be weakening after an impressive recovery.
Technical indicators are rarely perfect on their own. However, when combined with broader market structure, they can provide valuable insights into potential changes in trends.
Notably, Ethereum has already delivered a substantial move from its recent lows. Martinez believes the sell signal suggests it might be time to consider taking some profit.
ETH Retests Long-Term Channel Resistance
Meanwhile, the weekly chart presents an equally important development. Ethereum previously broke down from its multi-year ascending channel in June following its drop to $1,505.
However, recent bullish momentum has seen the altcoin leader stage a recovery back toward the lower boundary of the structure. Ether is now retesting that former support level, which has effectively become resistance.
Historically, breakdown and retest patterns often determine whether a market is preparing for another leg higher or simply experiencing a relief rally within a broader correction.
Analysis suggests that Ethereum is approaching a make-or-break moment. A successful reclaim of the support could push the asset back into the channel. Meanwhile, a rejection from this area may open the door for additional downside pressure in the coming months.
The current technical picture presents a cautious setup for Ethereum. While the asset has already produced a strong recovery from its lows, both the TD Sequential indicator and the long-term channel retest are warning that bullish momentum may be approaching a critical test.
Evans Kelvin
