Bitcoin is trading near all-time highs. The euphoria is palpable. And yet, beneath the surface of what looks like an unstoppable rally, a set of technical and on-chain indicators are flashing signals that have historically preceded sharp corrections. The question facing traders and institutional allocators isn’t whether Bitcoin can push higher — it clearly can — but whether the risk-reward calculus at these levels still makes sense.
According to a report from Yahoo Finance, prominent crypto analyst Ali Martinez has identified what he calls a developing sell signal on Bitcoin’s weekly chart. Martinez pointed to the TD Sequential indicator — a momentum-exhaustion tool originally developed by market technician Tom DeMark — which is printing a sell setup on the weekly timeframe. This indicator works by counting consecutive candles that close above or below prior candles in a specific sequence. When the count reaches nine, the indicator suggests the prevailing trend is exhausted and a reversal may be imminent.
Martinez isn’t some fringe voice. His analysis reaches hundreds of thousands of followers across social media platforms, and the TD Sequential has a documented track record of flagging Bitcoin tops — including the April 2021 peak near $64,000 and the November 2021 blow-off top around $69,000. Both instances saw significant drawdowns follow the signal.
But here’s the tension: Bitcoin doesn’t care about any single indicator.
The cryptocurrency surged past $110,000 in late May 2025, driven by a confluence of macro tailwinds that would make any asset class jealous. Spot Bitcoin ETFs continue to absorb supply at a staggering pace. MicroStrategy, now rebranded as Strategy, has accumulated over 568,000 BTC on its balance sheet according to recent filings, making it a de facto Bitcoin holding company with a market capitalization that reflects a significant premium to its net asset value. Sovereign wealth funds and pension allocators in Abu Dhabi, Wisconsin, and elsewhere have disclosed Bitcoin ETF positions. The supply shock from the April 2024 halving is still working its way through the market.
So we have a classic standoff: powerful fundamental demand meeting a technical signal that says the rally is getting long in the tooth.
The TD Sequential deserves more scrutiny than most traders give it. Developed by Tom DeMark in the 1990s, the indicator was designed to identify points of trend exhaustion rather than trend reversal per se. A completed sell setup (a count of nine) doesn’t mean price will crash tomorrow. It means the buying pressure that drove the trend has likely reached a point of diminishing returns. Sometimes the market consolidates sideways. Sometimes it corrects violently. And sometimes — particularly in strong bull markets — the signal simply fails, and price grinds higher after a brief pause.
That last scenario is what makes trading on the TD Sequential alone so treacherous. During the 2017 bull run, the indicator fired multiple sell signals on the weekly chart as Bitcoin climbed from $3,000 to nearly $20,000. Traders who acted on each signal left enormous gains on the table. The signal that finally mattered came in December 2017, at the absolute peak. Distinguishing the real signal from the false ones in real time is, to put it mildly, difficult.
Martinez’s warning gains additional weight when combined with other data points. On-chain analytics firm Glassnode has noted that long-term holder supply — Bitcoin held for more than 155 days — has begun declining, a pattern that typically emerges in the later stages of bull market cycles as veteran holders distribute coins to newer, less experienced buyers. This distribution phase can last weeks or months, but it’s a reliable marker of cycle maturity.
Exchange inflows have also ticked up. When large quantities of Bitcoin move to exchanges, it generally signals intent to sell. Not always. But the pattern is consistent enough that analysts track it religiously. CryptoQuant data shows exchange netflows turning positive on several recent days, suggesting some holders are positioning to take profits at these levels.
Then there’s the funding rate picture in perpetual futures markets. Funding rates on major exchanges like Binance and Bybit have been elevated, meaning traders holding long positions are paying a premium to maintain those positions. High funding rates reflect crowded positioning. Crowded longs are kindling for liquidation cascades.
None of this means Bitcoin is about to collapse. That distinction matters enormously.
What the data collectively suggests is that the easy money in this leg of the rally has likely been made. The asymmetry that existed when Bitcoin was trading at $70,000 or $80,000 — where the upside potential vastly outweighed the downside risk — has narrowed considerably at $110,000. The risk of a 15-20% pullback, which would take Bitcoin back toward the $88,000-$93,000 range, is nontrivial. And for leveraged traders, a move of that magnitude can be catastrophic.
Institutional players appear to be taking a more measured approach. According to recent reporting, BlackRock’s iShares Bitcoin Trust (IBIT) has seen inflows moderate from the torrid pace of Q1 2025, though they remain firmly positive. Fidelity’s FBTC and ARK 21Shares’ ARKB have shown similar patterns. The big money is still buying — just not with the same urgency.
This behavioral shift aligns with what you’d expect at elevated price levels. Institutions have mandates, risk limits, and rebalancing schedules. They don’t chase. When Bitcoin was trading at a discount to their models’ fair value estimates, they accumulated aggressively. Now that price has overshot many of those estimates, the buying has become more selective, more opportunistic.
Retail sentiment tells a different story. Google search trends for “Bitcoin” and “how to buy crypto” have spiked to levels not seen since late 2021. Social media engagement around Bitcoin and altcoins is surging on X, with posts about price targets of $150,000 and $200,000 gaining traction. The fear-and-greed index, published by Alternative.me, has been pinned in “extreme greed” territory for weeks.
Extreme greed doesn’t kill rallies. But it’s the soil in which corrections take root.
The macro backdrop adds another layer of complexity. The Federal Reserve has held rates steady through the first half of 2025, and market pricing suggests the first cut could come as early as September. Lower rates would be unambiguously bullish for Bitcoin and other risk assets. But the path to rate cuts is rarely smooth. Any hawkish surprise — a hot inflation print, a resilient jobs report, hawkish Fed commentary — could trigger a risk-off move that drags crypto lower alongside equities.
There’s also the regulatory variable. The Trump administration has adopted a notably crypto-friendly posture, with executive orders establishing a strategic Bitcoin reserve and directing agencies to develop clearer regulatory frameworks. This policy stance has been a significant tailwind. But regulatory clarity cuts both ways — it can also mean enforcement actions against bad actors in the space, which sometimes spook markets even when the long-term implications are positive.
So what should sophisticated market participants do with Martinez’s sell signal?
Treat it as one input among many. The TD Sequential is a useful tool, not a crystal ball. When it aligns with deteriorating on-chain metrics, elevated funding rates, and extreme sentiment readings, the probability of at least a meaningful pullback increases. That doesn’t mean selling everything. It might mean reducing position sizes, tightening stop losses, taking some profits on leveraged positions, or simply being more selective about new entries.
For longer-term holders — those with a multi-year time horizon — the calculus is different. Bitcoin’s structural supply dynamics, growing institutional adoption, and increasing recognition as a monetary asset suggest that the current cycle hasn’t peaked in the way 2017 or 2021 did. The halving cycle framework, while imperfect, points to a potential cycle top sometime in late 2025 or early 2026. If that framework holds, the current pullback risk is a speed bump, not a cliff.
The history of Bitcoin is littered with corrections of 20-40% within broader bull markets. The 2017 run featured at least five drawdowns exceeding 25%. The 2020-2021 cycle included a 53% crash in May 2021 before Bitcoin went on to make new all-time highs in November. These corrections are features, not bugs. They reset leverage, flush out weak hands, and create the conditions for the next leg higher.
Martinez’s signal, then, is best understood as a warning flare rather than an evacuation order. The rally has been powerful, the gains have been extraordinary, and the conditions for a pullback are building. Smart money doesn’t ignore these signals. It doesn’t panic either.
It adjusts.
The coming weeks will likely determine whether Bitcoin’s current consolidation around $110,000 resolves higher — potentially toward the $120,000-$130,000 range that several analysts have targeted — or lower, toward the support zones that on-chain data suggests could hold in the mid-$80,000s to low-$90,000s. The TD Sequential sell signal adds a note of caution to what has otherwise been an overwhelmingly bullish narrative. Whether that caution proves prescient or premature is something only the market itself can answer.
One thing is certain: at all-time highs, with leverage elevated and sentiment at extremes, the margin for error is razor thin. And in crypto, thin margins have a way of becoming very expensive, very fast.
WebProNews is an iEntry Publication