TD Sequential Indicates Buy Signal for XRP Amid Key Price Conditions

TD Sequential Indicates Buy Signal for XRP Amid Key Price Conditions – Analyst

The price of XRP kicked off the week with a strong bullish momentum, achieving an approximate rise of 7%. However, this momentum did not last, as the altcoin faced a significant decline on Wednesday, continuing on this downward trend. Despite the seemingly bearish outlook for XRP's future, a technical indicator has emerged that suggests a potential short-term recovery for the token.

Key Takeaways

XRP saw a significant jump at the beginning of the week but faced a downturn.
The TD Sequential indicator hints at a potential short-term rebound if certain conditions, like maintaining the $1.70 support, are met.
XRP Spot ETFs face substantial net outflows, indicating possible decreased institutional demand.
The current trading price for XRP is around $1.74, trending down 3.26% in the last day.

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TD Sequential Highlights Potential Trend Exhaustion

In a post on X on January 30, technical analyst Ali Martinez pointed out that XRP may soon witness a rebound if specific conditions are met. The key tool indicating this possibility is the TD Sequential, a technical analysis tool designed to identify whether a trend—upward or downward—may pause or even reverse. Simply put, this indicator tracks points of trend exhaustion over short timeframes.

The TD Sequential operates in two phases: the Setup Phase (counts from 1 to 9) and the Countdown phase (up to count 13), each with its interpretation. A completed count of “9” typically indicates diminishing selling pressure, while a complete “13” count signals an impending reversal.

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Source: @alicharts on X

From the chart shared by Martinez, a completed “9” count can be seen on the downside, implying that the momentum driving XRP's recent decline is approaching a point of exhaustion. Notably, this indicator aligns with the presence of a crucial price support level. Martinez states that if the integrity of the $1.70 support level is maintained, XRP could see a price rebound.

Should the $1.70 support bolster a rebound, the price range of $1.80 to $1.85 will serve as a resistance level that could challenge XRP's momentum. If XRP manages to build momentum and breaks through this barrier, $1.90 could act as another significant point of resistance.

XRP ETFs Experience $69 Million in Net Outflows Post-Thursdays Decline

According to data from the ETF tracking site SoSoValue, US XRP Spot ETFs are currently facing a total outflow exceeding $69 million. The first three days of the week saw positive net flows, totaling approximately $23.87 million. However, a substantial outflow of $92.92 million on Thursday rapidly reversed this positive trend, leading to a net outflow trend similar to last week's figure of $40.64 million.

A negative net flow typically suggests that institutional demand may be decreasing, signifying that more capital was withdrawn from the XRP ETFs than deposited. Given the sharp downtrend in XRP's price, it appears that institutional investors have significantly influenced the recent decline in the Ripple token's value.

Nevertheless, negative ETF net flows do not solely indicate a broader bearish trend. Instead, they might reflect profit-taking or de-risking actions by investors. As of this writing, XRP is trading at $1.74, having lost about 3.26% of its value over the past day, according to CoinMarketCap.

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XRP trading at $1.72 on the daily chart | Source: Tradingview.com