While the crypto market undergoes a relief rally after the recent downturn, Ethereum (ETH) is at a pivotal moment.
On-chain indicators suggest a consequential price movement is imminent for Ethereum. Renowned crypto analyst Ali Martinez recently highlighted key trends in Ethereum’s price history, using the TD Sequential setup to forecast potential outcomes for the second-largest crypto asset.
According to Martinez, Ethereum has followed a distinct pattern over the last two market cycles. Each time its price breaks above the TD setup resistance trendline, marked in red in the chart below, ETH enters a strong bull run.
Past breakouts have seen Ethereum surge by 8,885% in the 2017/2018 cycle and 1,462% in the 2020/2021 season, pushing it to new all-time highs during each instance. A similar robust bull trend unfolded in Q1 2024 when Ethereum’s price rose from around $1,400 to over $4,000, though it failed to establish a new cycle peak during this time.
Past Trend When Ethereum Tanked by 53% on Average
However, the flip side of this analysis is just as crucial. Whenever ETH breaks below the TD setup support trendline (green), a sharp correction tends to follow, averaging a 53% decline.
Looking at the historical chart, Ethereum has experienced three major corrections, with drops of 56.67%, 54.43%, and 51.41%, each time after losing support at key levels.
Ethereum Teeters on Critical Support
This pattern is now repeating, with Ethereum currently hovering near the $2,250 support level. Martinez noted that if ETH fails to hold above it, the market could see another steep drop, potentially mirroring the corrections of the past.
A factor that constitutes the strength of this support level is that it is around this level that a larger pool of investors entered the Ethereum market. For instance, data from IntoTheBlock shows that 2.4 million addresses purchased ETH between $2,268 and $2,340, collectively holding 52.59 million ETH tokens.
Martinez stressed that if this demand zone fails, it could trigger a sell-off as investors seek to limit their losses. The projected price drop could become severe as fewer addresses have bought ETH at other price levels, resulting in weak support against heavy selling pressure.
At press time, Ethereum’s market position has slightly improved, trading at $2,425, up by 1.655% over the past day.