• XRP price action develops two consecutive inside-bar daily candlesticks.
  • Rare and powerful bullish reversal pattern in development, confirmation still needed.
  • Downside risks remain but are likely limited.

XRP price could return to a leadership position in the altcoin market if it can pull off confirmation of one of the most potent and rare Japanese candlestick patterns in existence: the Squeeze Alert.

XRP price positioning for a monster bear trap and short squeeze

XRP price has a very positive number of bullish confluence levels on its daily chart. Between the candlestick chart and its oscillators, XRP could pull off a huge surprise and begin a significant rally. XRP will first need to complete and confirm the bullish Squeeze Alert pattern to pull off a maneuver that could begin a new bull market.

The Squeeze Alert (bullish) is a three-session reversal indicator that forecasts a turn-around and new uptrend. It is a rare pattern and is one of the most compelling bullish reversal indicators in Japanese candlestick analysis. The probability of a bullish reversal from this pattern is exacerbated if the Squeeze Alert develops near a support level.

  1. The first session is black (traditional bearish Japanese candlestick color, contemporary is red).
  2. The second session can be white (green) or black (red).
    1. The second session high is below the first session high.
    2. The second session low is above the first session low.
  3. The third session can also be white (green) or black (red).
    1. The third session high is below the second session high.
    2. The third session low is above the second session low.

However, while the current structure shows the Squeeze Alert is nearly complete, confirmation can only occur if an undeniable bullish daily candlestick develops within two to three periods after the third session. For example, a Bullish Engulfing candlestick or a bullish Marubozu would most definitely confirm the bullish Squeeze Alert.

Contributing to the likelihood of a bullish reversal for XRP price is the Composite Index forming support and pushing higher towards a cross above its fast-moving average. At the same time, The %B oscillator is about to cross back above the 0.2 level, giving a strong signal that the recent downside move is likely a massive bear trap.

XRP/USD Daily Ichimoku Chart

Buyers should expect an easy move to rest resistance at $0.90 where the Kijun-Sen, 38.2% Fibonacci retracement, and bottom of the Cloud (Senkou Span A) currently exist. Above that, the next major hurdle is the critical and vital $1.00 level. Ultimately, bulls will need to close and remain above the $1.00 level to pursue any new major uptrend.

The outlook of a bullish reversal will be invalidated if sellers push XRP to a close below the 50% Fibonacci retracement at $0.68. In that scenario, XRP price will likely fall to $0.55 and even deeper to a primary support zone near the $0.36 value area.

 

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Why Polygon’s MATIC bulls could be too eager and drop the ball on this rally

Why Polygon’s MATIC bulls could be too eager and drop the ball on this rally

Polygon (MATIC) price action has been on treading nervously this week, with weekly earnings switching back and forth between profit and loss. It all comes down to trading this Friday to see if bulls can eke out a winning week.

More Polygon News

How can traders squeeze in more gains as Shiba Inu price teases a 42% rally

How can traders squeeze in more gains as Shiba Inu price teases a 42% rally

Shiba Inu price positively reacted to the United States inflation report, forming a bullish candle on its daily chart. The second-largest meme coin brushed shoulders with $0.00001287 but pulled back to test support highlighted by the 100-day Simple Moving Average (SMA) at $0.00001170.

More Shiba Inu News

CRO price sees bulls using their last ammunition to attack $0.16

CRO price sees bulls using their last ammunition to attack $0.16

Crypto.com Coin (CRO) price action is looking to execute a bullish breakout above $0.16. Ignorant bulls will try to be part of that rally, but that could prove a big mistake as a few risks need to be taken into account to be sure that this rally still has legs.

More Crypto.com News

Solana traders’ focus on $58 as the rally starts to slow down

Solana traders’ focus on $58 as the rally starts to slow down

Solana (SOL) price action is set to close out the week with a mere 7% gain depending on where it ends  Friday evening after the US closing bell. Overall it has been a good trading week from a fundamental perspective and technicals in a supporting role.

More Solana News

Bitcoin: If bulls lose control here, BTC could revisit $21,000

Bitcoin: If bulls lose control here, BTC could revisit $21,000

Bitcoin price shows an interesting setup that could reveal its next move. On closer inspection,  its technicals support a bearish outlook for the leading crypto.  

Read full analysis

BTC

ETH

XRP