ETH tests $1,600 support for third time amid 14.6M exchange reserve low and TD Sequential buy signal

ETH printed a weekly low of $1,505 before recovering to $1,631, marking a 4.5% intraday gain that re-establishes price above the $1,600 threshold. The weekly candle opened at $2,004 and peaked at $2,018 before selling pressure dominated, resulting in an 18.58% weekly decline. Analysis of the multi-year macro structure indicates that the $1,600 baseline has functioned as a critical inflection point, halting declines in mid-2023 prior to the recovery toward $4,800 in 2025 and holding firm during the April 2025 correction. This current test represents the third contestation of this support level since 2023. The significance of this price memory stems from trader behavior; participants who bought during prior reversals treat returning price levels as reference points for action. Buyers who missed previous bounces view this as a second entry opportunity, and the frequency of successful holds increases the number of market participants monitoring the zone. For ETH at $1,600, two prior bounces mean a substantial portion of active traders are focused on this specific level.

Technical indicators reinforce the potential for stabilization at this juncture. The weekly RSI sits at 30.93 with the signal line at 38.59, positioning the asset near oversold territory last observed at confirmed cycle lows.

Concurrently, volume spiked to 1.65M ETH for the current weekly candle, representing the largest single-week volume reading visible on the chart. Data compiled by Woofun AI shows this surge is consistent with heavy selling at a support level being partially absorbed by buyers. Crypto analyst Ali Charts noted on X that the TD Sequential indicator flashed a buy signal on the ETH 3-day chart. 'The TD Sequential just flashed a buy signal on Ethereum,' Ali Charts stated, sharing a chart displaying a completed 9-count with an upward arrow at approximately $1,612. As a momentum exhaustion indicator, a 9-count buy signal does not predict the next directional move but signals that downward momentum has persisted for a statistically significant number of consecutive periods and may be cooling off. On the 3-day chart, each count represents three days of consecutive closes in the same direction, lending the signal more weight than identical readings on shorter timeframes.

The strategic value of this signal is amplified by its location directly within the $1,600 support zone that has held across two prior cycle phases. A momentum exhaustion signal appearing at a historically significant price level carries more weight than either reading would produce in isolation. On-chain metrics further support the bullish divergence. CryptoQuant's ETH Exchange Reserve data across all centralized exchanges reveals reserves have fallen to 14.6M ETH, the lowest level in the entire dataset. This continues a downward trend from approximately 21M ETH in mid-2025. A short-lived rise in reserves previously occurred when retail investors moved coins to exchanges to reposition portfolios, but that move has since reversed with reserves resuming their decline. Woofun AI notes that this ongoing outflow indicates holders are withdrawing assets to personal wallets for storage rather than positioning to sell at current levels.

The practical implication of these reduced reserves is direct and impactful on price elasticity. With fewer ETH sitting on exchange order books, the same level of buy pressure produces larger price moves than it would in a higher-reserve environment. If genuine demand returns at current levels, the low reserve backdrop means the market could react more sharply to the upside than historical patterns would suggest. At $1,631, ETH sits on a support level that has held twice before, with technical, on-chain, and momentum data all pointing toward stabilization rather than a continuation of the decline. The TD Sequential buy on the 3-day chart, the lowest exchange reserves in the dataset, and a weekly RSI approaching oversold territory are all aligned at the same price zone.

However, the weekly candle has not yet closed, leaving the outcome pending.

A close above $1,600 keeps the support intact and registers the $1,505 low as a wick, validating the structural floor. Conversely, a close below $1,600 removes the structural reference that anchored two prior recoveries and shifts the next confirmed support to the $1,400 to $1,500 zone. Until Sunday's close, everything the data is signaling remains an argument in progress rather than a confirmed outcome. Woofun AI analysis suggests that the convergence of these three distinct signals creates a high-stakes pivot point where the market's next major directional move will likely be determined by the final weekly candle formation.