Ethereum Signals Short-Term Correction Amid Dropping Reserves and Institutional Buying

Ethereum‘s TD Sequential indicator has triggered a sell signal, pointing to an imminent price correction after rejection at $4,085. Exchange reserves have dropped to 15.9 million ETH, signaling reduced selling pressure, while institutional accumulation like SharpLink’s holdings boost long-term confidence in ETH at $4,077.31.

• Ethereum faces short-term correction after TD Sequential ‘9’ sell signal and bearish candle closes.
• Exchange reserves fell from 27 million ETH in 2023 to 15.9 million by late 2025, indicating holder confidence.
• SharpLink boosted its ETH stash to 859,853 tokens valued at $3.5 billion, with staking rewards adding 5,671 ETH amid a market cap rebound to $490 billion.

What is Triggering Ethereums Price Correction Right Now？

Ethereum price correction is underway following a rejection at the $4,085 resistance level, confirmed by the TD Sequential indicator‘s ’9 sell signal. This technical pattern has led to five consecutive bearish candles, pushing ETH below the 0.618 Fibonacci retracement at $3,921. Deeper supports at $3,823 and $3,764 could be tested if selling persists, though a rebound might occur with renewed buying interest.

How Are Declining Exchange Reserves Impacting ETH Holders？

Ethereum exchange reserves have significantly decreased from 27 million ETH in early 2023 to just 15.9 million by late 2025, according to data from CryptoQuant. This reduction highlights a shift toward long-term holding and decentralized applications, easing sell-side pressure. During mid-2024 volatility, reserves remained stable, underscoring that price fluctuations were sentiment-driven rather than liquidity-based. Experts note an inverse correlation: lower reserves often precede price rallies, as seen in past cycles where ETH surged after similar drops. This trend fosters greater confidence among investors, with staking participation enhancing yields over time.

Source: Ali Charts Via X

The TD Sequential‘s red ’5‘ candle further suggests the downtrend isn’t fully exhausted, but key Fibonacci levels will determine if Ethereum price correction evolves into a larger reversal. Trading volume has supported recent recoveries, with ETH up 1.08% in the last 24 hours to $4,077.31.

Frequently Asked QuestionsWhat Does the TD Sequential Sell Signal Mean for Ethereum Investors？

The TD Sequential ‘9’ sell signal indicates a potential exhaustion of the uptrend, often leading to corrections as seen in Ethereums recent pullback from $4,085. Investors should monitor for bearish candle confirmations and supports like $3,764, while preparing for possible rebounds if volumes increase. This tool, developed by Tom DeMark, has historically pinpointed reversals with high accuracy in crypto markets.

Why Are Ethereum Exchange Reserves Dropping in 2025？

Ethereum exchange reserves are dropping due to investors moving assets to personal wallets for long-term storage and staking, reducing available supply on platforms. From 27 million ETH in 2023 to 15.9 million now, this shift correlates with price stability during volatility. It reflects growing adoption of DeFi and self-custody, as reported by on-chain analytics firms like Glassnode.

Key Takeaways

• Technical Correction Ahead: TD Sequential and Fibonacci levels confirm Ethereums short-term downward pressure, with risks to $3,764 support.
• Reduced Selling Pressure: Exchange reserves at 15.9 million ETH signal strong holder conviction and potential for future rallies.
• Institutional Momentum: SharpLinks 859,853 ETH holdings and staking rewards highlight growing corporate interest, supporting ETHs market cap near $490 billion.

Source: CryptoRand Via X

Conclusion

In summary, Ethereum‘s price correction driven by TD Sequential signals and Fibonacci breakdowns is tempered by declining exchange reserves and robust institutional accumulation, such as SharpLink’s expanded holdings to 859,853 ETH worth $3.5 billion. These factors underscore a resilient market foundation amid short-term volatility. As ETH trading volume stabilizes and staking rewards accumulate, investors can anticipate sustained growth potential in the coming months—consider monitoring key supports for strategic entry points.

Ethereum‘s broader ecosystem continues to evolve, with declining reserves from 27 million ETH in 2023 to 15.9 million in late 2025 reflecting a maturing network. Institutional moves like SharpLink’s additions, including 19,271 ETH at $3,892 and 5,671 in rewards, bolster confidence. Despite the correction phase, ETHs market cap rebound to $490 billion signals underlying strength. Analysts from sources like Ali Charts emphasize watching Fibonacci levels for reversal cues, while on-chain data from CryptoQuant supports the bullish long-term narrative. This combination of technical caution and fundamental positives positions Ethereum favorably for future appreciation, encouraging diversified approaches in volatile conditions.