XRP has gained over 68% in market value in the past two weeks.
Even though prices could advance towards $1, a correction appears imminent.
A spike in selling pressure could push XRP to $0.85 or even $0.75.
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Ripple has seen almost 68% gains over the last two weeks; still, the cross-border remittance token could be bound for a retracement before its uptrend resumes.
XRP Approaches Overbought Territory
XRP appears to be gearing for a correction after incurring significant gains.
The sixth-largest cryptocurrency by market capitalization has been on a roll lately. It was able to surge by nearly 68% in the last two weeks after reaching a local bottom at $0.55. Given the significance of the bullish impulse, XRP could soon be bound for a brief retracement.
The Tom DeMark (TD) Sequential indicator could soon present a sell signal on XRP’s daily chart. The bearish formation would likely develop as a green 9 candlestick, which is indicative of a one-to-four daily candlesticks correction.
Based on the moving averages, it appears that XRP could run towards the 200-day moving average at $1 before its uptrend reaches exhaustion. A spike in profit-taking could then push prices towards the 100- or 50-day moving average. These crucial support levels sit at $0.85 and $0.75, respectively.
XRP’s network growth further validates the pessimistic thesis. Data from Santiment shows that the recent upward price action has not been supported by a spike in the number of new daily addresses on the network. This sort of bearish divergence between prices and on-chain activity could result in a steep pullback as forecasted by the TD setup.
Although the technicals and the fundamentals anticipate a pullback in the near term, investors should pay close attention to the $1 resistance level. A sustained daily candlestick close above such a significant interest zone could have the strength to invalidate the bearish outlook.
Slicing through the $1 barrier might trigger FOMO among market participants, increasing the upward pressure behind XRP for an upswing towards $1.24.
Disclosure: At the time of writing, this author owned BTC and ETH.
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