The price of Ethereum (ETH) has been on a downward trend in recent days after failing once again to break above the $2,000 mark on the daily chart. However, a historically reliable technical indicator is now flashing a bullish reversal signal—potentially signaling a turnaround for the second-largest cryptocurrency by market cap.
As volatility continues to define the crypto markets, traders and analysts are constantly searching for dependable tools to forecast price movements. One such tool gaining attention is the Tom DeMark 9 (TD9) indicator, which recently triggered a buy signal for ETH on the daily timeframe. According to well-known analyst Joe McCann, who shared his findings on social media, historical data shows that TD9 buy signals have predicted ETH price increases with an impressive 78% accuracy rate.
Understanding the ETH TD9 Buy Signal
The TD9 indicator, developed by technical analyst Tom DeMark, is designed to identify potential trend reversals by analyzing price exhaustion—similar in concept to the Relative Strength Index (RSI), but with a focus on sequential price patterns. McCann highlighted that the current buy signal emerged after ETH dropped 8.7% from its recent highs, suggesting that selling pressure may be subsiding.
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This isn't just a speculative observation. McCann’s analysis reveals that following past TD9 buy signals, Ethereum has delivered strong short-term performance:
- Average 7-day return: +2.65%
- Median 7-day return: ~5%
- Win rate (7-day positive movement): 78%
These figures are compelling for active traders looking to capitalize on high-probability setups. McCann further refined the data by isolating market conditions similar to today’s environment—specifically comparing 2023 to the 2019 crypto cycle, a period marked by consolidation and gradual institutional adoption. In that narrower window, the TD9 signal's success rate jumps to nearly 90%, with average returns exceeding +7% over seven days.
Key Price Targets Ahead
Based on historical momentum following TD9 signals, potential upside targets for ETH include:
- $1,933: July opening price level
- $2,031: August 2022 bear market rally high
- $2,142: All-time high from 2021 before the broader market correction
Reclaiming $2,000 could act as both psychological and technical resistance-turned-support, reinforcing bullish sentiment if confirmed with volume.
Historical Performance: Successes and Exceptions
While the overall track record is strong, no indicator is foolproof. McCann’s research also highlights several instances where the TD9 buy signal failed to produce positive returns in the short term.
Notable failures include:
- March 13, 2018: ETH fell 19.3% within 7 days and 34.8% over 14 days post-signal.
- May 8, 2018: Another false signal led to a 22.1% drop in one week and 26.7% over two weeks.
However, these downturns were often followed by powerful recoveries. For example:
- December 10, 2018: After an initial 3.7% gain in seven days, ETH surged 53.0% over 14 days and 64.5% within 30 days.
- March 11, 2023: A recent success story where ETH rallied 18.8% in one week and added 29.9% over the next month.
This illustrates an important nuance: while the predictive power of TD9 weakens beyond the first week, many signals eventually lead to meaningful rallies—even if delayed.
Accuracy Decay Over Time
McCann’s data shows a decline in effectiveness as the holding period extends:
- 7 days: 78% win rate (+2.65% avg return)
- 14 days: 55.5% win rate (+3.8% avg)
- 30 days: 63.0% win rate (+6.9% avg)
This suggests that traders may benefit most from short-term positioning rather than long-term assumptions based solely on this signal.
Market Context: The Upcoming Fed Meeting
Even with promising technical indicators, external macroeconomic forces remain critical. The Federal Open Market Committee (FOMC) is set to announce its latest rate decision today, with a 98.9% probability of a 25-basis-point hike, according to CME Group’s FedWatch Tool.
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The bigger question isn’t whether rates will rise—but whether this marks the end of the hiking cycle. If Chair Jerome Powell adopts a dovish tone or hints at a pause, risk assets like ETH could see renewed momentum. Conversely, hawkish commentary may prolong bearish pressure across financial markets.
“July 26 is the Fed’s latest meeting, and Jerome Powell is expected to hike rates by 25 basis points. Will he crash the ETH bulls’ party during the press conference?” — Joe McCann
At the time of writing, ETH trades at $1,859, still below key resistance but positioned near support levels that have historically preceded rebounds.
Frequently Asked Questions (FAQ)
Q: What is the TD9 indicator?
A: The Tom DeMark 9 (TD9) is a technical analysis tool that identifies potential trend exhaustion and reversal points by counting price sequences. It helps traders spot when an asset may be oversold (buy signal) or overbought (sell signal).
Q: How reliable is the TD9 signal for Ethereum?
A: Historical data analyzed by Joe McCann shows a 78% accuracy rate for ETH buy signals within seven days of activation. In market cycles similar to 2019 and 2023, accuracy rises to nearly 90%.
Q: Can I rely solely on TD9 for trading decisions?
A: No single indicator should be used in isolation. While TD9 offers valuable insights, it works best when combined with other technical tools, volume analysis, and macroeconomic context.
Q: What factors could invalidate the current ETH buy signal?
A: A hawkish FOMC outcome, broader market sell-off, regulatory news, or low trading volume could all undermine bullish momentum despite the technical setup.
Q: What are realistic price targets if the signal succeeds?
A: Key levels to watch include $1,933 (July open), $2,031 (2022 rebound high), and $2,142 (2021 peak). A close above $2,000 would confirm stronger bullish conviction.
Q: When does the TD9 signal lose relevance?
A: The indicator’s predictive strength diminishes after the first week. While longer-term gains are possible, the highest-probability window is within 7–14 days post-signal.
Final Thoughts
The confluence of a high-accuracy technical signal and favorable market positioning makes this a pivotal moment for Ethereum. With macro risks front-and-center due to the Fed meeting, traders should remain cautious yet attentive. The TD9 buy signal doesn’t guarantee a rally—but history suggests it significantly improves the odds.
For those monitoring ETH closely, combining technical precision with macro awareness offers the best path forward. Whether you're a short-term trader or a long-term holder, understanding patterns like TD9 can provide an edge in navigating crypto’s unpredictable terrain.
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