- TD Sequential signals XRP correction despite recent 11% surge in bullish momentum.
- Inverse head and shoulders pattern hints at possible breakout on higher timeframes.
- XRP ETF speculation fuels investor optimism, with US approval odds at 80% for 2025.
XRP’s recent price action has sparked discussions among analysts, with indicators suggesting a possible pullback despite ongoing bullish momentum. The asset recently surged 11%, but technical signals indicate a potential correction. Meanwhile, speculation around an XRP ETF has fueled investor interest, adding another layer of volatility to the market.
TD Sequential Signals Possible Correction
According to analyst Ali Martinez, XRP’s three-hour chart has flashed a sell signal using the TD Sequential indicator. This setup, often signaling trend exhaustion, suggests that a price correction may be imminent. The formation of a “9” candle reinforces this possibility, as previous occurrences of this pattern have historically led to short-term retracements.
If a pullback occurs, key support levels to watch include $2.65 and $2.60. These price zones could serve as stabilization points before the asset potentially resumes its upward trajectory. Traders will be closely monitoring whether XRP sustains these levels or experiences further declines.
$XRP could be gearing up for a pullback, as the TD Sequential indicator flashes a sell signal on the 3-hour chart after the recent 11% rebound! pic.twitter.com/k8SetFIQ8F
— Ali (@ali_charts) February 20, 2025
Bullish Formation on Higher Timeframe
Despite short-term bearish signals, CryptoBusy points out a bullish inverse head and shoulders pattern forming on XRP’s higher timeframes. This setup often indicates a potential breakout if the price successfully breaches the neckline resistance. Should this scenario play out, XRP could witness further upside momentum.
However, resistance at current levels may lead to price consolidation or a temporary pullback before any decisive move. Investors are weighing these possibilities as they assess XRP’s next directional move.
Market Dynamics and On-Chain Activity
As of press time trading at $2.70, Coinglass on-chain data suggests shifting sentiment in the XRP market. Between April and November, outflows dominated, keeping prices relatively stable. A strong inflow surge in December, surpassing $100 million, triggered a breakout, while January saw inflows exceed $200 million, coinciding with XRP’s rise above $2.
However, February saw sharp outflows, at times nearing -$300 million, signaling profit-taking and possible sell pressure. If inflows regain strength above $200 million, bullish sentiment could return, pushing prices higher. Conversely, prolonged outflows may lead to further declines.
XRP ETF Developments Boost Sentiment
The possibility of an XRP ETF has added significant optimism to the market. Hashdex recently secured approval to launch a Spot XRP ETF in Brazil, awaiting an official launch date from the country’s B3 exchange. Meanwhile, in the US, the SEC has acknowledged multiple XRP ETF filings, including submissions from Canary Capital, WisdomTree, Bitwise, Grayscale, and 21Shares.
According to Polymarket data, the likelihood of a US-based XRP ETF launching in 2025 stands at 80%. This growing anticipation continues to influence market sentiment, potentially driving XRP’s long-term trajectory.
