Over the past few weeks, the price of XRP has finally started to break higher. As covered in previous reports from this very outlet, the cryptocurrency gained over 35% from its bottom of $0.18 established in December, rallying as high as $0.25 just a few days ago as of the time of this article’s publishing.
Although there are many investors who wish for this momentum to be maintained, a key price signal just flashed, indicating that XRP may have some downside from here.
XRP Prints Bearish Technical Signal
According to a Telegram channel tracking the Tom Demark Sequential, better known as the TD Sequential indicator, the XRP against the U.S. dollar chart just printed a “sell 9” candle on the daily chart.
As an aside: the TD Sequential is a time-based indicator created by a special advisor to Point 72 Asset Management and a CEO of a market research and analytics firm. Per a technical analysis site, “When the 9 count is completed, it is at that point, a price pause, price pullback, or reversal is likely.”
Although it isn’t clear how accurate the TD Sequential is for XRP, the indicator has been especially accurate in calling macro reversals for Bitcoin.
Per Demark himself, 13 candles marked the top of Bitcoin’s bull run to $20,000 in December 2017, the bottom at $3,150 in December 2018, and the local top at $14,000 just last July.
Long-Term Trend Positive?
Although XRP may be preparing for a short-term reversal, the consensus is that the cryptocurrency remains long-term bullish, just like market leader Bitcoin.
Per previous reports from this outlet, the aforementioned Telegram channel observed a “buy 9” candle on the weekly, suggesting a bullish long-term outlook despite the abovementioned potential for a drawback in prices.
Also, analyst CryptoWolf recently noted that per his earlier analysis, XRP has finally started to decisively break out of a falling wedge pattern that has constrained price action for the past seven months. The cryptocurrency has also surmounted a key horizontal resistance that has been important on a macro basis.
XRP breaking out. 🚀 pic.twitter.com/QIs4z3uWZ4
— CryptoWolf (@IamCryptoWolf) January 18, 2020
With this in mind, he suggested in the below chart that he expects for XRP to target the 0.382 Fibonacci Retracement of the entire falling wedge over the coming weeks, which suggests a 25% rally is on the horizon.
Photo by Breno Machado on Unsplash