Ethereum's weekly chart just triggered a TD Sequential sell signal for the first time in nine months, and the CLARITY Act cleared a key Senate committee hurdle on a 15-9 bipartisan vote. The technical warning, flagged by analyst Ali Martinez, carries weight: the last such signal, in late August 2025, preceded a 63% correction from Ethereum's all-time high. Now traders are watching whether history repeats — or whether a new regulatory framework changes the math.
Sell signal after nine months
Martinez laid out three price targets if the correction plays out: an initial drop to $1,900, then $1,565 mid-term, and a long-term floor near $1,090. That's a steep slide from current levels around $2,300. The indicator's track record bolsters the warning — earlier buy signals in mid-April and mid-June 2025 led to 87% and 134% rallies, respectively. The sell signal in August 2025, by contrast, nailed the top.
Ethereum jumped 3.5% intraday on Thursday before bumping into the $2,320 resistance zone. But the move didn't break the month-long sideways range between $2,200 and $2,400. The price is stuck, and the TD Sequential suggests that consolidation could resolve to the downside.
Realized profits spike, Santiment urges caution
Santiment data shows realized profits hit $74.58 million — the highest in three weeks — even as ETH dropped 5.5% over three days. That's a bearish divergence: holders are taking money off the table while the price falls. Santiment advised a cautious stance, warning traders to wait for deeper realized losses as a potential bottoming signal and to avoid aggressive positioning until the distribution phase ends.
On-chain activity volume picked up, with 4-hour candles showing notable price compression around the $2,241 level. That tight range often precedes a breakout, but the direction remains in question.
CLARITY Act heads to Senate floor
While traders watch Ethereum's charts, a separate story is unfolding in Washington. The CLARITY Act — a market structure bill for crypto — advanced to a full Senate vote after the Banking Committee voted 15-9 in favor. The bipartisan split suggests the bill has real momentum, though final passage is far from guaranteed. If enacted, it would give the Commodity Futures Trading Commission clearer oversight of digital asset spot markets, potentially reshaping how exchanges and tokens are regulated.
The timing isn't great for Ethereum bears: a regulatory tailwind could blunt a selloff. But the TD Sequential signal doesn't care about legislation. It just counts bars.
