While XRP is retesting a key support area, some analysts have suggested that the altcoin is preparing for a major expansion in the coming months, as a potential trend reversal begins to take shape and its 2017 formula repeats.
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XRP Prepares For Big Increase
On Friday, XRP hit a 12-day low, falling to the $2.02 level before exploding. Notably, the cryptocurrency has been trading within the $2.05-$2.35 range for almost two weeks, moving between the middle and lower areas of this price range most of the time.
During its recent performance, Sjuul from AltCryptoGems noted that the altcoin is “starting to look better, especially after this bullish market structure with new highs.” The analyst stressed that the cryptocurrency has been trending slowly since August, only printing lower and lower prices.
However, it broke out of this structure and recorded its first high in months after the first meeting of the year, setting the stage for a possible pullback. “Now, we must maintain this bullish structure at any cost and build a higher level in the next dip,” warned Sjuul.
Meanwhile, market watcher ChartNerd pointed out striking similarities between XRP’s 2017 playbook and its current performance. In the X post, the analyst confirmed that the altcoin is repeating its 2016-2017 formula, which led to a massive rally towards its previous high (ATH).
Meanwhile, XRP saw a breakout of a multi-year textbook congruent triangle formation, followed by a multi-month ABC consolidation before its 1,500% mark. This time, the cryptocurrency repeated the breakout of the triangle pattern of the same valuation, and is currently in Wave C of its ABC consolidation period.
For the analyst, a deeper retracement of Wave C is possible if the multi-month support of $1.80 is lost. However, he added that “signs of cyclical formula repetition XRP is preparing for an extension to $8/$13/$27,” which would be a 300%-1,250% increase from current levels.
Q1 Comes Close to Defining XRP’s Future
In addition to his bullish forecast, ChartNerd also shared an important warning for the next two months. According to the analyst, “XRP has just over 2 months to make this 3M bearish Heikin-Ashi candle formation,” or it will risk a major correction.
In the video analysis, he explained that, in the past, whenever an altcoin saw large rallies followed by a red candle during a three-month period, “it usually indicates the beginning of a downtrend or a period of great consolidation.”
In 2014, XRP saw a bearish candlestick print in a period of three months after a significant pump, which was followed by a correction and consolidation “for quite a few years,” he explained.
“The same thing happened again in 2018. We had this big XRP rally, and as soon as we printed a three-month bearish candle in the Heikin-Ashi candlestick pattern, (…) we entered a bear market,” continued ChartNerd.
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Similarly, the cryptocurrency repeats the same performance in 2021. Now, XRP is starting to form a red candle at this time and has about 2 months and 16 days to close the quarter on a positive note.
“We have until March before this candle closes. (…) So, what we don’t want to see is this three-month Heikin-Ashi candle full of body, because if we see it, that’s when we will see a deep correction in the next six to nine months and even 12 months,” concluded the analyst.
As of this writing, XRP is trading at $2.05, a 1.7% decline over the weekly period.
Featured image from Unsplash.com, Chart from TradingView.com
