On Wednesday, the XRP price marked its sixth consecutive loss day after closing in the red below $0.48. Like any digital asset, this continuous close in a loss has significant implications that could be reflected in the asset’s price in the short term.
XRP Price Sees Six Consecutive Red Closes
The XRP price began a losing streak on Friday last week that has carried on into its sixth consecutive day. Every day this week has marked a red close, registering a trend that rarely happens in the price of the digital asset asset.
So far this year, there has been only one other instance of this happening and that was at the beginning of August, shortly after Ripple’s first victory over the United States Securities and Exchange Commission (SEC).
In this instance, the six consecutive red daily candles preceded a massive drop in price. The XRP price would initially see some strength in the weeks following this but it would prove to be a ‘fakeout’ as the price dropped from $0.63 to $0.43 toward the end of the month. This translated to a 30% drop in the price.
Going further back to May 2022, this formation has had the same impact on the XRP price. In this instance, the price went on to complete seven consecutive daily red closes but the eventual outcome remained the same. In the following weeks, the XRP price fell over 50%, going from $0.64 to a low of $0.33 before seeing a recovery back above $0.4.
6 consecutive daily red candles appeared twice in 2022 | Source: XRPUSD On Tradingview.com
Will The Decline Continue?
Given the last two times that this trend has appeared, it has been incredibly bullish, ending in a double-digit drop in price. However, an earlier appearance in early 2022 suggests that this is not always true for the XRP price.
In January 2022, XRP recorded six consecutive daily red candles. However, it went the other way compared to the subsequent appearances. After trading in a tight range for a few weeks, XRP recorded a breakout that took its price from January’s $0.54 lows to February’s $0.914 highs. This was an almost 70% increase in price, a much higher percentage than the dips that have occurred in similar cases.
What this points to is that there are no absolutes when it comes to the prices of cryptocurrencies such as XRP. While the historical data could point to a more bearish outcome, it also shows that there is the possibility for a breakout, especially if demand starts to rise for the digital asset.
If the XRP price sticks to the January-February 2022 trend, then it could see a price increase that brings it above $0.8. However, if the May 2022 and August 2023 trends prevail, then the digital asset could be gearing up for a decline below $0.3.