Ripple could be rejected at $1
- XRP is up almost 68% in the last two weeks.
- Although the price could rally to $1, a correction seems imminent.
- A surge in selling pressure could push XRP to $0.85 or even $0.75.
Ripple is up almost 68% in the past two weeks. However, the token could be tied to a retracement before resuming its uptrend.
Ripple is approaching overbought territory
XRP appears to be preparing for a correction after a significant gain.
Recently, the sixth largest cryptocurrency by market cap has rallied. It has rallied nearly 68% over the past two weeks after hitting a local bottom at $0.55. Given the magnitude of the bullish momentum, Ripple could soon be tied to a short-term retracement.
The Tom DeMark (TD) Sequential indicator might be giving a sell signal on the daily chart soon. If the indicator prints a candle with a count of 9, a correction of one to four daily candlesticks is possible.
Based on the moving averages, Ripple looks set to hit the 200-day ma at $1 before its bullish momentum dwindles. An increase in profit-taking pressure could then push the price towards the 100- or 50-day ma. These key supports lie at $0.85 and $0.75, respectively.
XRP/USDT daily chart | Source: TradingView
Ripple’s on-chain signal further confirms the bearish outlook. Data from Santiment shows that the recent upside isn’t being helped by the surge in daily new addresses on the network. This type of bearish divergence between price and on-chain activity can result in a sharp drop as predicted by the TD setup.
Although technical indicators and fundamentals are calling for a short-term decline, investors should keep an eye on the $1 resistance level. A breakout and a daily close above this level could do the trick. As this could trigger FOMO among market participants, increase buying pressure and push the price towards the next resistance at $1.24.
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