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Ethereum has largely shown sideways movement between $2,500 and $2,350 over the past seven days. This lateral movement has yet to give rise to a clear path as to how crypto will perform in the future, shaking the sentiment of many bulls.
In an interesting analysis of the use of TD Setup, crypto analyst Ali Martinez highlighted a critical price level that investors should watch in the market. ETH price trajectory. At the heart of this analysis is the price of $2,250, a level that could be the boundary between a bullish recovery and a sharp correction.
ETH Price Must Hold $2,250
The TD setup is very popular among crypto analysts and investors. Historically, Ethereum has shown a clear reaction after moving above or beyond the TD pattern. Its reliability in identifying key reversal points has made it a must-have tool for analysts like Ali Martinez.
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Using an ETH/US dollar price chart he shared on social media platform Martinez noted that The TD Sequential has made or broken cryptocurrency price action in the past while also highlighting notable examples. Every time ETH price breaks above the TD setup resistance trendline, a strong uptrend has always followed. On the other hand, when ETH fell below the setup support line, it corrected by an average of 53%.
The first significant break above the TD setup resistance triggered an 8,885% rally, which saw the ETH price reach an all-time high of $1,138 at the time. Conversely, the first time ETH price fell below the TD pattern, it corrected by 56.67%. The last breakout above the TD pattern occurred in March this year, which saw the price of ETH increase by around 113% as it surpassed $4,000 for the first time in two years.
Recent price momentum places the TD setup around $2,250. According to Ali Martinez, a move below this price could trigger a significant drop in prices. If a historical average of 53% were to repeat itself, Ethereum could reach as low as $1,100.
Current market overview
At the time of writing, Ethereum is trading at around $2,410, approximately 7% above the critical threshold of $2,250 identified by the TD setup. Although ETH price has managed to stay above this level for now, its proximity to this key price level makes it a critical level to watch.
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The TD Sequential Indicator identifies potential exhaustion points in an asset’s trend, whether bullish or bearish. Therefore, a break below $2,250 could mean that final reversal of a bullish Ethereum to a bearish sentiment.
Market sentiment towards Ethereum remains mixed at the moment. Sellers currently have the upper handbut a break above $2,500 could pave the way for bullish momentum.
Featured image created with Dall.E, chart from Tradingview.com
