Ethereum’s monthly TD Sequential indicator has sparked renewed optimism following the appearance of its first bullish trigger since March 2025. Previous monthly buy signals had preceded rallies of 235% in 2022 and 182% in 2025, rendering the latest signal challenging to overlook. However, the indicator merely indicated that Ethereum might have neared another macro turning point rather than affirming the onset of a new bull market. Historical performance alone does not ensure a similar outcome, as broader market conditions vary across cycles. Derivatives activity indicated a resurgence of confidence, as traders augmented their exposure to Ethereum. At this juncture, Open Interest reached 11.16 billion, marking a daily increase of 13.15%, while Funding Rates experienced a significant surge of 113.86% to 0.0129. Those figures indicated that leveraged long positions increased during the most recent recovery rather than staying inactive.
However, the increase in leverage has also heightened the risk of liquidation should Ethereum be unable to sustain its recent gains. Positive funding suggested that long traders were willing to pay a premium to maintain their positions, thereby reinforcing the bullish sentiment prevalent in perpetual futures markets. However, the data pertaining to derivatives alone did not substantiate the monthly TD Sequential signal. Rather, it indicated that speculative demand had reemerged, with price action tasked with validating whether buyers could maintain the increasing optimism. Ethereum rebounded from a well-defined double-bottom near $1,565 after buyers consistently defended that support level. The recovery elevated the price beyond $1,700, establishing the subsequent technical hurdle at approximately $1,800, with $2,000 serving as the next significant resistance should buying momentum continue. RSI has risen to 51.65, surpassing the neutral threshold following a rebound from significantly oversold conditions. That shift indicated an enhancement in purchasing power rather than a decline in demand. Even so, Ethereum persisted in trading beneath its significant resistance levels, notwithstanding its recovery of short-term support.
The current structure indicated that buyers had regained control following the correction. Still, only a decisive break above $1,800 would bolster the argument that the monthly TD Sequential signal corresponds with a more significant trend reversal rather than merely another transient recovery. The 24-hour Liquidation Heatmap indicated that the most significant aggregation of leveraged positions was observed in the range of $1,740-$1,750. This established a notable liquidity cluster directly above Ethereum’s prevailing price. Markets frequently tend to move towards areas of significant leverage, as liquidations generate further trading activity. Consequently, Ethereum maintained the potential for a further short-term increase prior to facing more formidable resistance around $1,800.Meanwhile, another notable liquidity pocket persisted in the range of $1,680-$1,650, suggesting potential downside volatility should buyers relinquish control. The prevailing distribution suggested prioritising an effort to absorb excess liquidity initially.
However, the heatmap underscored areas of interest rather than ensuring a definitive direction, indicating that Ethereum still required a confirmed breakout to bolster the overarching bullish thesis. Conclusively, the monthly TD Sequential buy signal has revitalised the long-term bullish outlook; however, it has not confirmed that Ethereum has entered a new macro uptrend. The double-bottom recovery, RSI improvement, and rising derivatives activity bolstered the bullish proposition. However, Ethereum would likely need to reclaim $1,800 before the technical structure is fully aligned with the indicator. Until then, the recovery remained constructive; however, confirmation would hinge on buyers surpassing nearby resistance instead of solely depending on the historical efficacy of the monthly signal.