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Ether Flashes Bullish 'DeMark' Signal, Technical Analysis Suggests

source-logo  coindesk.com 26 September 2023 11:25, UTC

Ether's (ETH) immediate prospects look positive as a technical analysis indicator, known to mark turning points in the market, is flashing a bullish signal.

That's according to Fairlead Strategies' Founder, Katie Stockton, who informed clients on Monday that the counter-trend buy signal from DeMARK Analytics' TD (Tom Demark) Sequential indicator could lead to ether defending the weekly Ichimoku cloud support at $1,580 even as other studies favor a deeper price slide.

"A counter-trend ‘buy’ signal from the daily TD Sequential indicator suggests support [at $1,580] will hold, given the success of other recent ‘red 13’ signals," Stockton said in a note to clients.

DeMark indicators help market participants gauge the state and health of the current trend and potential inflection points and are quite popular on the Bloomberg terminal.

DeMark Analytics' daily sequential indicator generates a buy signal after three conditions are satisfied, according to the CMT Association.

First, nine or more consecutive daily UTC closes must be below the corresponding closes four days earlier. Second, the high of any day on or following the eighth day must be greater than the low of any day three or more days earlier.

Once the above conditions are satisfied, traders count the number of days with a closing price lower than the close two days ago. When this count reaches 13, a buy signal is generated.

The TD sequential is marked by red numbers on the above chart. The latest 13 count comes as some analysts worry the lack of activity on Ethereum may push its native token, ether, lower.

The MACD histogram, an indicator used to gauge trend strength, is teasing a bearish reversal with an impending drop below zero. Per Stockton, the way the MACD is positioned favours a downside break of the support at $1,580 and move toward $1,350.

However, the MACD's bearish signal is likely to be overshadowed by the bullish TD sequential, as the latter correctly marked short-term trend reversals early this year.