Ethereum has largely shown sideways movement between $2,500 and $2,350 over the past seven days. This sideways movement has yet to result in a clear path for how the crypto will perform in the future, shaking the sentiment of many bulls.
In an interesting analysis using TD Setup, crypto analyst Ali Martinez highlighted a critical price level that investors need to watch in the 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.
Using an ETH/US dollar price chart that he shared on social media platform 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.
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 the final reversal from bullish Ethereum to bearish sentiment.
Market sentiment towards Ethereum remains mixed at the moment. Sellers currently have the upper hand, but a break above $2,500 could pave the way for bullish momentum.
