The talk of the crypto industry over the last few weeks has been focused on the massive gains from many altcoins across the top ten cryptocurrencies by market cap, however, few assets were buzzing as much as Ethereum and Tezos.
The two altcoins are up well over 100% year-to-date, however, both have just flashed a very dangerous sell signal that could cause a steep correction and these two top performing crypto assets to retrace much of their recent parabolic bull rallies.
Are These Top Performing Altcoins Part of a Greater Crypto Correction?
The number two cryptocurrency by market cap, Ethereum, and relative newcomer to the crypto market top ten, Tezos, have had an explosive first two months of the new calendar year.
Ethereum was up well over 125% year-to-date from trough to peak before the recent correction took the second-largest cryptocurrency down a few notches.
Meanwhile, during January and February, Tezos had already quadrupled in value, with over 200% returns from the 2020 low to the recent high.
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The two assets appeared to be unstoppable or at least had been showing little signs of slowing down their bullish momentum.
But that was until a wider crypto market correction began to cause these parabolic assets to retrace, and could soon be headed much lower.
Ethereum and Tezos Flash Sell on TD 9 Sequential Indicator
Analysts are conflicted if the rally is over or not, but a sell signal from the TD 9 sequential indicator across both crypto assets on their trading pairs against BTC, suggest that further upside will be limited until a deeper correction occurs.
Both ETH/BTC and XTZ/BTC have given a sell signal on the ninth candle in a previously bullish sequence.
The TD Sequential Indicator was designed by financial market wizard Thomas DeMark and is used to signal a buy or sell in assets depending on if a series or sequence of candlesticks close in a certain manner.
Following at least 9 consecutive days of a steady uptrend, these strong performing altcoins have reached a 9 on the TD Sequential Indicator, suggesting now is an ideal time to sell the asset in anticipation of retracement ahead.
In the past, the TD 9 Indicator has been used to spot Bitcoin’s top at $20,000 and then the bottom at $3,100 and $6,400 three Decembers in a row.
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Given the tool’s accuracy and the indicator’s creator reputation for market timing, the probability that Ethereum and Tezos recent rallies having finished remain high.
Retracing from here would likely take Ethereum back to the low $200 range, and Tezos back under a more reasonable $2 per XTZ token.
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