Ethereum (ETH) is drawing heightened attention from market analysts as its exchange reserves surge, sparking concerns of a potential "sell-the-news" event. A prominent crypto analyst has highlighted unusual on-chain activity, suggesting growing pressure in the market that could influence ETH’s price trajectory in the near term.
Rising Exchange Balances Signal Potential Profit-Taking
Ali Martinez, a well-known crypto trader and technical analyst, recently shared insights indicating a notable increase in Ethereum’s presence on exchange wallets. Over the past two weeks, more than 242,000 ETH—worth over $900 million at current prices—have been transferred to addresses linked to major cryptocurrency exchanges.
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This movement suggests that holders may be preparing to sell, either to lock in profits or react to shifting market sentiment. When large volumes of assets move to exchanges, it often precedes increased selling pressure, as these platforms serve as gateways for converting digital assets into fiat or other cryptocurrencies.
Martinez explained:
“Looking at Ethereum’s balance on exchanges reveals a spike in the tokens available to sell. Over the last two weeks, over 242,000 ETH have moved to cryptocurrency exchange wallets. This indicates increased trading activity on exchanges that can contribute to price volatility.”
Such data is closely monitored by traders because rising exchange balances typically contrast with accumulation trends, where investors move assets to private wallets for long-term holding.
TD Sequential Indicator Flashes Sell Signal
Adding to the cautionary outlook, Martinez pointed to a technical red flag: the Tom DeMark (TD) Sequential Indicator has triggered a sell signal on Ethereum’s daily chart.
The TD Sequential is a popular technical analysis tool used to identify potential trend exhaustion and reversal points. It works by counting price bars (candlesticks) under specific closing conditions, aiming to forecast when an uptrend may lose momentum.
Currently, the indicator shows nine consecutive green (bullish) candlesticks, which historically suggests that a correction or pullback could follow. According to Martinez:
“The increasing ETH deposits to cryptocurrency exchange wallets hint at the possibility of a sell-off or a spike in profit-taking. Meanwhile, the Tom DeMark (TD) Sequential indicator presents a sell signal on Ethereum’s daily chart.”
He further noted that if selling pressure intensifies, Ethereum could retrace for one to four days—or even enter a new downward phase—before the broader uptrend resumes.
Key Resistance Zone Ahead
Despite short-term bearish signals, Martinez emphasized that Ethereum still has a clear path toward $5,000, provided it clears a crucial resistance zone.
The most significant hurdle lies between $3,940 and $4,054, where over 1.16 million addresses previously bought approximately 574,660 ETH. This range represents a dense area of historical demand and could act as strong resistance if tested again.
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However, if ETH manages to close a daily candle above **$4,170**, the bearish outlook would be invalidated. Such a breakout could trigger renewed bullish momentum and potentially initiate a new upward countdown phase targeting $5,000.
“If ETH overcomes this hurdle and prints a daily candlestick close above $4,170, the bearish outlook will be invalidated. This could result in a new upward countdown phase toward $5,000.”
This level serves as a key confirmation point for traders watching for sustained bullish continuation.
ETF Momentum Boosts Market Sentiment
Amid these technical developments, positive catalysts continue to emerge in the Ethereum ecosystem. Earlier this week, multiple proposals for Ethereum-based exchange-traded funds (ETFs) cleared a critical regulatory hurdle with the U.S. Securities and Exchange Commission (SEC). While approval is not guaranteed, the progress marks a significant step forward and has bolstered investor confidence.
ETF approvals could bring institutional-grade infrastructure, improved liquidity, and broader market access—similar to the impact seen after Bitcoin ETFs were authorized earlier in 2024.
Still, markets often react unpredictably to anticipated news events. The current rise in exchange balances may reflect traders positioning ahead of potential ETF-related volatility—a classic "buy the rumor, sell the news" scenario.
At the time of writing, Ethereum is trading at $3,732, down 2.31% over the past 24 hours. While short-term pressure builds, the longer-term fundamentals remain strong, supported by network upgrades, growing decentralized application (dApp) activity, and increasing adoption of layer-2 scaling solutions.
Frequently Asked Questions
What does a rising exchange balance mean for Ethereum?
A rising exchange balance typically indicates that investors are moving ETH onto platforms where it can be sold easily. This often precedes increased selling pressure and may lead to short-term price declines, especially if combined with weak momentum or negative sentiment.
What is the TD Sequential Indicator?
The Tom DeMark Sequential Indicator is a technical analysis tool designed to identify potential trend reversals by counting price bars under specific closing conditions. A "sell setup" occurs after nine consecutive bullish candles, suggesting exhaustion in an uptrend and a possible pullback.
Could Ethereum still reach $5,000?
Yes—according to analyst Ali Martinez, Ethereum can resume its upward trajectory toward $5,000 if it closes above $4,170 on a daily basis. Clearing the resistance zone between $3,940 and $4,054 will also be critical for confirming bullish momentum.
What triggers a "sell-the-news" event?
A "sell-the-news" event occurs when investors buy an asset in anticipation of positive news (like ETF approval), then sell once the news is confirmed. The market reaction often results in price stagnation or decline despite favorable developments.
How do ETF proposals affect Ethereum’s price?
ETF proposals increase institutional interest and regulatory legitimacy. While not immediate price drivers, successful approvals can lead to sustained inflows from traditional finance players, enhancing liquidity and long-term value perception.
Is now a good time to buy Ethereum?
Market timing is inherently risky. With technical indicators signaling caution and key resistance levels nearby, traders should monitor price action around $4,170 and on-chain flow trends before making decisions. Long-term investors may view pullbacks as accumulation opportunities.
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Conclusion
Ethereum stands at a pivotal juncture. On-chain data reveals rising exchange balances and technical indicators suggest short-term caution. However, the path to $5,000 remains open if key resistance levels are overcome.
With ETF momentum building and network fundamentals strengthening, ETH’s long-term outlook remains optimistic—even as near-term volatility looms. Traders and investors alike should keep a close eye on both price action and on-chain behavior to navigate what could be a defining phase in Ethereum’s 2025 journey.
Core Keywords: Ethereum, ETH price, exchange balance, sell-the-news, TD Sequential Indicator, Ethereum ETF, resistance level, $5,000 target