XRP dropped to a three-week low of $2.81 on Tuesday but multiple technical indicators now suggest the cryptocurrency may be positioned for a rebound. The TD Sequential metric has flashed buy signals on both daily and hourly timeframes, while XRP closed with gains against Bitcoin despite broader market weakness.
What to Know:
- XRP hit $2.81 on Bitstamp, marking its lowest point in three weeks after losing the $3.00 support level
- TD Sequential buy signals appeared on both daily and hourly charts, the same indicator that correctly identified XRP's July peak at $3.65
- The token showed relative strength against Bitcoin as BTC dominance declined from 57.9% to 57.4% in a single day
Technical Analysis Points To Reversal
The TD Sequential indicator, which identifies potential market exhaustion points and trend reversals, generated a buy signal on XRP's daily chart yesterday. Cryptocurrency analyst Ali Martinez highlighted this development, noting the metric's previous accuracy in calling XRP's all-time high of $3.65 in mid-July.
Martinez expanded his analysis today, pointing to additional buy signals appearing on the hourly timeframe. "XRP looks ready to rebound as the TD Sequential prints a buy on the hourly chart," Martinez wrote on social media platform X.
The convergence of signals across multiple timeframes represents a shift from the bearish sentiment that has dominated XRP trading since its July peak. Technical analysts often view such alignment as a stronger indication of potential price movement than isolated signals on single timeframes.
Bitcoin Pair Performance Offers Additional Support
While XRP struggled against the U.S. dollar, its performance against Bitcoin painted a different picture. Analyst CRYPTOWZRD noted that XRP closed with gains against the market leader, suggesting underlying strength in the altcoin.
"XRP and XRPBTC closed bullish," CRYPTOWZRD observed. "We should see further upside momentum in XRPBTC as BTC.D declines."
Bitcoin's market dominance fell by 0.5 percentage points in a single day, dropping from 57.9% to 57.4% according to CoinGecko data. This decline in Bitcoin dominance typically signals increased investor interest in alternative cryptocurrencies, potentially benefiting assets like XRP.
The analyst identified the $3.02 level as a critical resistance point for XRP's recovery. This price level previously served as support during XRP's rally but has now transformed into a barrier the token must overcome to resume its upward trajectory.
Market Context and Price Action
XRP's recent decline came after the token lost its $3.00 support level, a psychological and technical benchmark that had provided stability during previous market fluctuations. The breakdown below this level triggered additional selling pressure, pushing the cryptocurrency to its current three-week low.
Some technical projections had suggested XRP could fall as low as $2.10 if the correction continued unabated. However, the emergence of multiple buy signals has shifted analyst sentiment toward a more optimistic outlook.
The cryptocurrency's all-time high of $3.65 represented a significant milestone for XRP, which had previously struggled to break above its 2017-2018 cycle peaks. The July rally brought renewed attention to Ripple's native token and its potential role in cross-border payment systems.
Understanding Key Technical Terms
The TD Sequential indicator, central to the current analysis, measures market momentum by counting consecutive price closes in the same direction. When the count reaches specific thresholds, it suggests the current trend may be exhausted and due for reversal.
Bitcoin dominance represents Bitcoin's market capitalization as a percentage of the total cryptocurrency market. When this metric declines, it typically indicates capital flowing from Bitcoin into alternative cryptocurrencies, a phenomenon known as "altcoin season."
Cross-border payment tokens like XRP derive their value proposition from potential adoption by financial institutions seeking faster and cheaper international transaction methods. This utility-focused narrative has distinguished XRP from other cryptocurrencies that primarily serve as stores of value or speculative assets.
Closing Thoughts
Multiple technical indicators now point toward a potential XRP price recovery following its decline to $2.81. The TD Sequential buy signals on both daily and hourly charts, combined with XRP's relative strength against Bitcoin, suggest the recent correction may be nearing completion. However, the token still faces the challenge of reclaiming the $3.02 resistance level to confirm a sustained reversal.