As XRP retests a crucial support area, some analysts have suggested that the altcoin is preparing for a massive expansion in the coming months as a potential trend reversal begins to form and the 2017 formula repeats itself.
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XRP is gearing up for massive expansion
On Friday, XRP hit a 12-day low, falling to the $2.02 area before bouncing. Notably, the cryptocurrency has been trading within the $2.05-$2.35 range for almost two weeks, moving between the mid and lower zones of this price range for most of this period.
Amid his recent appearance, Sjuul from AltCryptoGems noted that the altcoin “is starting to look better, especially after the bullish market structure breaks with a new higher high.” The analyst highlighted that the cryptocurrency has been moving steadily lower since August, exclusively printing lower lows and lower highs.
However, the price has broken out of this structure and reached a higher high for the first time in months after the rally at the beginning of the year, paving the way for a possible reversal. “Now we must maintain this bullish structure at all costs and hit a higher low on the next dip,” Sjuul warned.
Meanwhile, market observer ChartNerd be to a striking similarity between XRP’s 2017 playbook and its current performance. In an
At the time, XRP saw a breakout of a multi-year symmetrical triangle formation, followed by a multi-month ABC consolidation before the 1,500% markup. This time, the cryptocurrency has repeated a similar breakout of a symmetrical triangle pattern and is currently in Wave C of its ABC consolidation period.
For the analyst, a deeper Wave C retracement is possible if the multi-month support at $1.80 is lost. Nevertheless, he added that “repetition of cycle formulas indicates that XRP is gearing up for expansion towards $8/$13/$27,” which would be a 300%-1,250% increase from current levels.
Q1 close to define the future of XRP
Despite its bullish forecast, ChartNerd also shared an important warning for the next two months. According to the analyst, “XRP has just over 2 months to invalidate this bearish Heikin-Ashi candle formation from 3M,” or risk a massive correction.
In a video analysisHe explained that in the past when the altcoin saw massive rallies followed by a red bearish candle within a three-month time frame, it would “normally signal the start of a downtrend or a macro consolidation period.”
In 2014, XRP saw a bearish candle print within a three-month time frame after a notable pump, which was followed by a correction and consolidation “over a number of years,” he explained.
“The same thing happened again in 2018. We had a huge rally for XRP, and as soon as we pushed a bearish three-month candle in the Heikin-Ashi Candle formation, (…) we entered the bear market,” ChartNerd continued.
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Likewise, the cryptocurrency repeated the same performance in 2021. Now, XRP has started forming a red candle in this time frame and has around 2 months and 16 days to end the quarter on a positive note.
“We have until March before this candle closes. (…) So what we don’t want to see is this powerful three-month Heikin-Ashi Candle, because if we see it, we will probably see a deeper correction for the next six to nine and even twelve months,” the analyst concluded.
At the time of writing, XRP is trading at $2.05, down 1.7% in the weekly time frame.
Featured image from Unsplash.com, chart from TradingView.com