Ethereum is currently testing the upper limits of its price channel, and the emergence of a TD Sequential sell signal is heightening concerns about a potential decline. Analysts suggest that while ETH might initially target liquidity above recent peaks, a failure to sustain this upward momentum could lead to significant lower levels around $1,770, $1,700, and eventually $1,505.

The TD Sequential indicator indicates that Ethereum's upward trajectory may be faltering after an extensive rally. With the confluence of technical resistance alongside decreasing momentum, a brief downturn appears increasingly likely. The challenge comes as previous expansions have struggled at this same resistance level.

Currently, $1,770 seems to be a critical support where buyers may intervene to prevent further declines. However, if Ethereum breaks below this support, attention will shift to $1,700 as the next crucial target for bears.

There remains a need for confirmation of this bearish setup, which would involve rejection and continued downward movement. If ETH were to break out decisively above the current resistance, it might suggest that buyers are still in control.

Interestingly, the recent rebound from June 26 appears to be strong, but a wider analysis leaves room for a final downward movement. Analyst TraderJBx predicts that prior to any significant drop, Ethereum could first attempt to sweep liquidity above recent highs before retracing towards the equal lows near $1,505.

The current chart depicts a five-wave advance from late June, which typically signals ongoing upward movement following a pullback. Under this scenario, ETH could see a retracement towards the $1,700 to $1,760 area before aiming for a push above $2,000. However, a more bearish perspective reveals that previous lows formed at similar levels, suggesting the possibility of an inverted flat correction.

In this context, if Ethereum surpasses the recent $1,850 threshold, it could attract late buyers before taking a downward turn. A rejection after such a move would refocus attention on $1,750 and $1,600, ultimately leading towards the significant low near $1,505.

A sustained breakout above $2,000 would challenge the bearish narrative, fostering hopes for a more substantial rally. Until then, the ongoing uptrend may merely serve as a temporary liquidity play rather than the start of a confirmed bullish trend.

This article is for informational purposes only and does not constitute financial advice.