The ABS uses tone wheels (like serrated rings at the axle) to find out how fast each wheel is turning compared to each other, so yes, it is most likely the sensor that "sense" the ups and downs of the tone wheel, it can be just bad or disconnected or dirty or have fallen of it's place, the only thing the computer knows is that it isn't receiving the signal from the sensor or the signal doesn't make sense and it is letting you know that. Hope it helps, I tried to describe the system and potential failure issues as simple as I can, again I hope is enough. Good luck
