Ethereum price screams 'sell,' but fundamentals have never been stronger
|- Ethereum price hints at a correction due to the TD Sequential indicator's recent sell signal.
- While a downswing could push ETH near its previous ATH at $1,440, it is unlikely due to increasingly bullish fundamentals.
- Declining ETH supply on exchanges and other fundamentals hint that ETH might be headed to $3,000 shortly.
Ethereum price notes a slow down in its 150% year-to-date return. Although the recent sell-off may have played a role in reducing its momentum, the Tom DeMark (TD) Sequential indicator a halt in the smart contracts platform token's rally.
Ethereum price at crossroads as bullish momentum wanes
Ethereum price has seen a drastic reduction in momentum as the last three 3-day candles have grown increasingly small.
The TD Sequential indicator's most recent sell signal presented in the form of a green nine candlestick affirms the lack of buyers and the mounting selling pressure.
Technically, this setup stipulates that a one to four candlestick correction must follow.
If this were to occur, then ETH could head down to the 78.6% Fibonacci retracement level at $1,490.
On the off chance, the price slices through the barrier mentioned above, then ETH could correct up to its previous ATH at $1,440.
ETH/USDT 3-day chart
While the technical aspects indeed point towards a correction, on-chain fundamentals suggest that this correction might either be small or never come.
Exchange addresses holding ETH has dropped nearly 9% since January 9. Correspondingly, Ethereum price has seen a 30%.
Exchange addresses holding ETH chart
Whales holding 100,000 to 1 million ETH have increased their holdings by 3.25% from February 2 and 4.6% from January 2. Within the same periods, ETH price has seen a 140% and 16.5% increase.
Ethereum holder distribution chart
Glassnode's on-chain metric shows that about 97% of all the coins in circulation are in profit, further supporting the bullish thesis.
Coinbase, America's most popular exchange, announced a waitlist for ETH staking, which signals that more ETH supply will be taken out of circulation and placed in staking, effectively reducing the coins available for selling.
All-in-all, ETH's prospects, in the long run, seems quite bullish. Hence, a decisive one-day or perhaps even a 3-day close above the new all-time high at $1,871 will invalidate the short-term bearish outlook and rally the coin to new highs around the 161.8% Fibonacci retracement level at $3,000.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.