1. Introduction

In the wave of today’s digital finance, the cryptocurrency market is rapidly expanding. XRP, as one of the most notable cryptocurrencies, has demonstrated innovative potential in the global payment system due to its unique technological architecture and use cases. It aims to reduce cross-border payment costs and improve transaction efficiency through decentralization, addressing the pain points of slow transfer speeds and high fees in traditional financial systems. As a result, it has attracted significant attention from investors and financial institutions.

The TD Sequential indicator, developed by technical analyst Tom DeMark, holds a unique position in the field of financial market technical analysis. Through a series of specific price patterns and counting rules, it helps traders accurately identify potential market turning points. Whether capturing short-term price fluctuations or identifying medium- to long-term trend reversals, the indicator provides critical decision-making insights. It is widely used in traditional financial markets such as stocks, forex, and futures, as well as in emerging cryptocurrency markets.

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2. Principles of the TD Sequential Indicator

2.1 Definition and Founder of the TD Sequential Indicator

The TD Sequential indicator, short for Tom DeMark Sequential Indicator, was created by renowned Wall Street technical analyst Tom DeMark. With years of expertise and practical experience in financial market technical analysis, DeMark developed a series of influential analytical tools, among which the TD Sequential indicator stands out. Upon its introduction, the indicator quickly gained traction in financial markets due to its unique perspective and calculation method, effectively identifying potential market turning points. It provides traders with valuable signal references and is widely applied across various financial markets, including stocks, futures, forex, and emerging cryptocurrencies.

2.2 Calculation Rules and Core Logic

The TD Sequential indicator employs a distinctive and complex calculation method. It primarily analyzes the relationship between price highs, lows, and current prices to assess trend sustainability and potential reversal points. Specifically, the indicator counts price movements based on predefined rules. When certain conditions are met, the count begins, starting from 1 and incrementing sequentially.

For example, in a bullish trend, if a closing price is higher than the closing price four periods prior, it is marked as “1.” If the next candle’s closing price remains higher than the closing price four periods before, it is marked as “2,” and so on. Conversely, in a bearish trend, if a closing price is lower than the closing price four periods prior, it is marked as “1” for the bearish price movement, with subsequent lower closes incrementing the count.

This counting mechanism forms the foundation of the TD Sequential indicator’s trend analysis. Its core logic lies in identifying potential trend reversal signals by meticulously analyzing price movements. When the count reaches a specific threshold (e.g., 9 or 13), it suggests an impending trend reversal.

In practical applications, the 9-count and 13-count sequences are most commonly used. The 9-count sequence typically identifies short-term trends, signaling potential reversals when completed. The 13-count sequence, on the other hand, focuses on medium-term trends, indicating stronger reversal potentials. These sequences provide traders with trend insights across different timeframes, aiding in better market timing.

2.3 Buy and Sell Signal Generation Mechanism

The TD Sequential indicator generates buy and sell signals based on its unique counting rules and price comparisons. A sell signal is triggered when there are nine consecutive price periods where the closing price exceeds the highest price of the prior 4 days. This suggests that after an extended uptrend, the market may be overbought, with bullish momentum waning, presenting a potential selling opportunity.

Conversely, a buy signal arises when there are 9 consecutive price periods where the closing price falls below the lowest price of the prior 4 days. This indicates an oversold market with weakening bearish momentum, signaling a potential rebound and buying opportunity.

While these signals offer clear trading references, the TD Sequential indicator is not infallible. Market conditions are complex and influenced by numerous factors. Therefore, traders should not rely solely on this indicator but instead combine it with other technical indicators, fundamental analysis, and market news to enhance decision-making accuracy and reliability.

3. Current State of the XRP Market

3.1 Basic Introduction to XRP

XRP is the native cryptocurrency of the Ripple network, issued by Ripple Labs, with a fixed total supply of 100 billion tokens and no additional issuance. The Ripple network is an open-source, distributed payment system designed to facilitate fast and low-cost global money transfers. Unlike other cryptocurrencies, XRP transactions are confirmed within seconds, compared to Bitcoin and Ethereum, which typically take around 10 minutes and several minutes, respectively. This rapid transaction speed gives XRP a significant advantage in cross-border payments, meeting the high efficiency demands of financial institutions.

XRP holds a prominent position in the cryptocurrency market. By market capitalization, it has consistently ranked among the top cryptocurrencies. In 2024, it briefly climbed to the fourth spot, trailing only Bitcoin, Ethereum, and Tether (USDT). XRP boasts a broad global user base and adoption, with numerous financial institutions and enterprises integrating its technology. For instance, Ripple has partnered with multiple banks and payment providers worldwide to optimize cross-border transactions using XRP, reducing costs and improving speed. These collaborations underscore XRP’s unique utility and market influence, making it a focal point for investors and market participants.

3.2 XRP Market Size and Trading Activity

As of the end of March 2025, the market value of XRP is about 80 billion US dollars, ranking fourth in the cryptocurrency market. Its circulation has reached about 45 billion, accounting for approximately 45% of the total supply. The relatively stable circulation reflects the maturity of the XRP market and investors’ recognition of its value. The large amount of circulating XRP provides sufficient liquidity to the market, enabling transactions to proceed relatively smoothly.

In terms of trading activity, XRP has performed outstandingly. In 2024, the daily average trading volume of XRP reached around 5 billion US dollars, ranking among the top in the cryptocurrency market. The high trading volume indicates a high level of market attention to XRP, frequent trading, and an increase in investor participation enthusiasm. During major market events or positive news releases, XRP’s trading volume can experience significant growth. For example, in November 2024, Ripple made significant progress in its legal dispute with the SEC, with the judge significantly reducing Ripple’s fine. Following this news release, the price of XRP surged significantly, and the trading volume sharply increased in the short term, with the daily trading volume exceeding 20 billion US dollars, demonstrating a strong market response to the news and optimistic expectations for the future development of XRP.

3.3 XRP price trend historical review

Looking back at the price trend of XRP, it shows obvious volatility. During the cryptocurrency bull market period from 2017 to 2018, the price of XRP experienced a significant rise. Starting from less than $0.01 in early 2017, it soared to nearly $3.4 in January 2018, an increase of over 300 times. This rise was mainly attributed to the overall bullish market sentiment in the cryptocurrency market, as well as Ripple’s active layout and cooperation in the field of cross-border payments, attracting a lot of attention and capital inflow from investors. However, as the cryptocurrency market entered a bear market afterwards, the price of XRP also plummeted significantly. By the end of 2018, the price dropped to around $0.2, a decline of over 90%.

During the period of 2020-2021, with the recovery of the cryptocurrency market, the price of XRP rose again, breaking through $1 at one point. However, in December 2020, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple Labs and its two executives, accusing them of conducting unregistered securities offerings through the sale of XRP. This event had a significant impact on the price of XRP, causing a rapid decline. Subsequently, the price of XRP fluctuated between $0.4 and $0.8, and market confidence in XRP was somewhat weakened due to the uncertainty of the lawsuit.

In 2024, XRP prices once again experienced significant fluctuations. At the beginning of the year, as market expectations for the outcome of the Ripple vs. SEC lawsuit gradually improved and the overall upward trend in the cryptocurrency market continued, XRP prices began to steadily rise. Especially in November, after Trump was elected as the U.S. president, the market expected the new government to have a more crypto-friendly regulatory policy, increasing the possibility of XRP ETF approval. This led to a burst of XRP price surge, briefly surpassing $3 and hitting a historic high in nearly seven years. These major events had a crucial impact on the price trend of XRP, highlighting the significant roles of regulatory policies, market sentiment, and macroeconomic environment in the cryptocurrency market.

4. Case analysis of the application of the TD Sequential indicator in the XRP market

4.1 Case 1: After the TD Sequential indicator shows a sell signal, the price of XRP rebounds

Taking the XRP market trend as an example during the period from November 25th to December 5th, 2024, XRP price was in a clear upward trend. Starting from November 25th, the XRP price started to rise from around $0.5, with strong bullish momentum and the price continuously climbing. On November 29th, the TD Sequential indicator began counting on the 4-hour chart of XRP, as the price further rose, closing prices of 9 consecutive 4-hour periods were higher than the highest price of the previous 4 periods, forming a complete 9 sequence sell signal on November 30th, when the XRP price reached around $1.2.

After the sell signal from the TD Sequential indicator, the XRP price quickly changed its trend. Starting from December 1st, the price entered a retracement phase, with bearish forces gradually taking the lead. Over the next 3 days, the price continued to fall, hitting a low near $0.9, with a retracement of about 25%. This price retracement lasted for about 5 trading days, during which there were brief rebounds, but overall still in a downward trend. It wasn’t until December 5th that the price found some support near $0.9, showing signs of stabilization.

By analyzing this case, it can be seen that the TD Sequential indicator accurately captured the turning point of the XRP price uptrend in this case. After the indicator issued a sell signal, the price quickly retraced, and the retracement amplitude and time were quite significant. This indicates that in this specific market environment, the sell signal of the TD Sequential indicator has a high effectiveness in predicting the decline of XRP price, providing investors with timely and accurate sell reference signals, helping investors to avoid the risks brought about by price declines.

4.2 Case 2: Interpreting the Effectiveness of TD Sequential Indicator Sell Signals in Combination with Market Environment

Analyze the market conditions between January 10, 2025, and January 20, 2025. During this period, the entire cryptocurrency market was in a complex state. Bitcoin, as the leader of the cryptocurrency market, experienced significant price fluctuations within the range, which had a significant impact on the overall market sentiment. Other mainstream cryptocurrencies such as Ethereum also showed varying degrees of price fluctuations.

On January 10, after experiencing a previous rise, the price of XRP reached a stage high of $2.5. At this time, the TD Sequential indicator appeared a sell signal on the daily chart of XRP, with the closing price of nine consecutive trading days higher than the highest price of the previous four trading days, forming a 9 sequential sell signal. However, after the signal appeared, the price of XRP did not immediately experience a significant decline.

This is mainly due to the influence of some other factors in the market environment at that time. On the one hand, Ripple company continues to release new cooperation news in the field of cross-border payments. These favorable news provide some support for the price of XRP, enabling the bullish force to be maintained to a certain extent. For example, Ripple has reached a cooperation with a large European bank to further expand the application of XRP in cross-border payments. This news enhances the market’s expectations for the future value of XRP, attracting some investors to continue holding or buying XRP. On the other hand, there were numerous rumors in the market about the possible approval of XRP ETF, which also sparked investors’ optimism and kept the price of XRP relatively stable even after the appearance of sell signals.

However, with the gradual shift in market sentiment and the impact of the price correction of other cryptocurrencies, the XRP price began to slowly decline after January 15. By January 20, the price had dropped to around $2.1, a decrease of 16%. This indicates that although the sell signal of the TD Sequential indicator was somewhat disrupted in a complex market environment and the price did not plummet immediately, the indicator still to some extent foreshadowed the downward trend in price over a longer period. Its effectiveness was still demonstrated after considering various market factors. This also reminds investors that when using the TD Sequential indicator for trading decisions, they must fully consider various factors in the market environment, combine fundamental analysis with other market information for comprehensive judgment, in order to improve the accuracy of trading decisions.

4.3 Compare and summarize multiple cases comprehensively

By comparing and analyzing the cases of sell signals displayed by the TD Sequential indicator in multiple XRP markets, some commonalities and differences can be found.

In most cases, when the TD Sequential indicator issues a sell signal, XRP prices have shown varying degrees of decline or pullback in common. This indicates that the indicator has a certain universality and reliability in identifying the turning points of XRP price uptrends, providing investors with a reference for selling opportunities to a certain extent. Moreover, in terms of timing, price pullbacks or declines usually begin to appear shortly after the signal is issued, generally within 1-5 trading days, providing investors with a time window to adjust their investment strategies promptly.

However, there are also significant differences between cases. First, the magnitude of price retracement varies in different cases. In some market environments that are relatively stable without major positive or negative news disturbances, the price retracement can be relatively large, reaching 20% - 30%, as in case one; while in complex market environments with multiple influencing factors, the price retracement may be smaller, around 10% - 15%, as in case two. Secondly, the duration of price retracement also varies. In some cases, the price retracement lasts for a short period, possibly only 3 - 5 trading days, after which the price stabilizes or rises again; while in other cases, the price retracement lasts longer, up to 1 - 2 weeks, closely related to the overall market trend, trading volume, and the trends of other relevant cryptocurrencies.

In addition, the market environment has a significant impact on the sell signals of the TD Sequential indicator. In a bull market, even if the indicator issues a sell signal, due to the overall optimistic sentiment of the market and continuous inflow of funds, the price retracement may be relatively small, and the retracement period may be short, and the price will quickly resume its upward trend; while in a bear market or during a market adjustment phase, after the indicator issues a sell signal, the price decline may be larger and last longer. Therefore, when investors analyze the price trend of XRP using the TD Sequential indicator, they cannot view the indicator signals in isolation. It is necessary to fully consider the complexity of the market environment, combine other technical analysis tools and fundamental information, conduct a comprehensive analysis, in order to more accurately grasp market opportunities and make rational investment decisions.

5. Other Factors Affecting XRP Sell Signal Judgment

5.1 The impact of macroeconomic factors on the price of XRP

The macroeconomic situation is an important external factor affecting the price of XRP. During periods of global economic prosperity, investors’ risk appetite is usually higher, and they are more willing to invest in assets with high risk-return ratios. The cryptocurrency market, as an emerging investment field, often attracts a large amount of capital inflow. XRP, as an important part of the cryptocurrency market, will also benefit from this market environment, and prices may rise. For example, in 2021, as the global economy gradually recovered from the epidemic, the cryptocurrency market ushered in a bull market, and the price of XRP also rose significantly.

Conversely, in times of economic recession or instability, investors’ risk aversion will increase, preferring to hold traditional safe-haven assets such as gold, the US dollar, etc., and reduce investments in risk assets such as cryptocurrencies. This may lead to capital outflows from the cryptocurrency market, causing prices to fall, and XRP is also difficult to escape. At the beginning of 2020, the outbreak of the COVID-19 pandemic triggered a global economic recession, causing a severe impact on the cryptocurrency market, and XRP prices plummeted sharply in a short period of time.

Changes in monetary policy also have a significant impact on the price of XRP. When the central bank implements loose monetary policy, such as lowering interest rates and quantitative easing, market liquidity increases, funding costs decrease, investors seek higher return investment opportunities, the cryptocurrency market may attract some funds inflow, driving up the price of XRP. Conversely, when the central bank tightens monetary policy, raises interest rates, and reduces the money supply, funds may flow back from risky assets to traditional financial markets, and the price of XRP may be suppressed. The Fed started a series of interest rate hikes in 2022, leading to capital outflows from the cryptocurrency market and a significant downward trend in the price of XRP.

5.2 The role of the overall trend of the cryptocurrency market

The cryptocurrency market has strong interactivity, and the price trend of XRP is closely related to the overall market trend. In a bull market, most cryptocurrency prices will rise, and investors’ optimism and continuous influx of funds will drive the overall market upwards. At this time, even if the TD Sequential indicator issues a sell signal for XRP, due to the strong upward momentum of the overall market, XRP’s price may only experience a brief pullback and then quickly resume the upward trend. During the cryptocurrency bull market period from 2017 to 2018, despite multiple sell signals for XRP issued by the TD Sequential indicator, XRP’s price continued to rise after a brief pullback, showing a strong upward trend overall.

During a bear market, when the market is generally falling, investor confidence is hit, and a large amount of capital flows out. In this scenario, sell signals generated by the TD Sequential indicator may be reinforced by the market’s downward trend, leading XRP’s price to fall more than expected and for a longer duration. During the cryptocurrency bear market of 2018-2019, as the overall market declined, XRP’s price experienced significant drops and remained in a downtrend for an extended period after the TD Sequential indicator issued sell signals.

The overall trend of the market will also affect investors’ psychology and behavior. In a bull market, investors tend to be more optimistic, may be cautious about sell signals of technical indicators, or even ignore these signals, continue to hold or buy XRP, which will to some extent delay the time of price decline or mitigate the magnitude of the decline. In a bear market, investors are more panicked. Once the TD Sequential indicator issues a sell signal, it may trigger a large amount of selling behavior, exacerbating the price decline.

5.3 Development Dynamics of Ripple and XRP Itself

Ripple’s development status and strategic layout have a direct impact on the price of XRP. If Ripple achieves new breakthroughs in the field of cross-border payments, establishes partnerships with more financial institutions, and expands the use cases of XRP, it will increase market demand for XRP, thereby driving up the price. Ripple has partnered with many well-known banks globally to settle cross-border payments using XRP. After this news is released, the price of XRP often shows a significant increase.

On the contrary, if Ripple encounters obstacles in business expansion, such as the slow progress of cooperative projects, technical research and development difficulties, it may reduce market expectations for XRP, leading to a price decline. In 2020, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple, accusing it of illegally issuing XRP as securities. This event severely impacted Ripple’s business development, also causing a significant drop in XRP price and greatly undermining market confidence in XRP.

The technical upgrades and improvements of XRP itself will also affect its price and sell signal judgment. If XRP can continuously improve transaction speed, reduce transaction costs, and enhance security, it will increase its competitiveness in the cryptocurrency market, attract more investors, and drive up prices. On the other hand, if XRP lags behind its competitors in technology or experiences technical vulnerabilities and security issues, it could lead to a loss of confidence from investors and a price decline. In addition, changes in XRP’s market circulation will also have an impact on prices. If Ripple adjusts the release mechanism of XRP to reduce market circulation, it may drive prices up due to increased demand; conversely, increasing circulation may lead to price declines.

6. Trading strategy recommendations for XRP based on TD Sequential indicator

6.1 How to use the TD Sequential indicator to develop a selling strategy

When using the TD Sequential indicator to formulate the XRP selling strategy, it is necessary to closely monitor the counting process of the indicator. When the XRP price trend is in the rising stage, investors should remain highly vigilant once the TD Sequential indicator starts counting. Taking the 9 sequence as an example, when the count reaches 9, and meets the condition that the closing price of 9 consecutive price periods is higher than the highest price of the previous 4 days, the selling signal at this time has important reference value. Investors may consider gradually selling the held XRP at the closing price of the first price period after the signal appears, or when there are obvious signs of subsequent price decline, such as the price falling below the short-term moving average (e.g., 5-day moving average).

For example, in previous cases, when the TD Sequential indicator forms a 9 sequence sell signal on the 4-hour chart of XRP, the price often starts to retrace in the short term. Therefore, investors can combine the short-term price trend to choose the right time to sell after the signal appears. For more aggressive investors, they can sell part of their position immediately after the signal appears to lock in some profits; while for more conservative investors, they can wait for the price to confirm a downtrend before selling to avoid misjudgment due to temporary price fluctuations.

6.2 Optimizing Trading Strategies with Other Technical Indicators

To improve the accuracy and reliability of trading strategies, it is recommended to combine the TD Sequential indicator with other technical indicators. The Relative Strength Index (RSI) is a commonly used auxiliary indicator that measures the strength of XRP price increases or decreases. When the TD Sequential indicator issues a sell signal and the RSI indicator exceeds 70, entering the overbought zone, it indicates that the market’s bullish strength is excessively depleted, and the likelihood of price pullback is higher. At this time, the credibility of the sell signal is higher.

The Moving Average Convergence Divergence (MACD) can also provide strong support for trading decisions. When the DIF line in the MACD indicator crosses below the DEA line to form a death cross, and the TD Sequential indicator simultaneously shows a sell signal, this is usually a strong sell signal. This means that the short-term trend of the market is starting to decline, echoing the price decline trend indicated by the TD Sequential indicator, and investors should consider selling decisively.

The Bollinger Bands (BOLL) indicator can display the volatility range and trend of the XRP price. When the price touches the upper band of the Bollinger Bands and the TD Sequential indicator issues a sell signal, it indicates that the price may have risen to a relatively high level, facing significant retracement pressure. Investors can combine other indicators to comprehensively judge whether to sell. By combining the TD Sequential indicator with these technical indicators, you can analyze market trends from multiple perspectives, accurately grasp buying and selling points, optimize trading strategies, and improve investment returns.

6.3 Risk Management Measures and Stop Loss Settings

Risk management is crucial in XRP trading, as it is key to protecting investor funds and reducing investment risks. Setting stop-loss points reasonably according to the TD Sequential indicator signal is one of the important means of risk management.

When setting the stop-loss point, you can refer to the historical volatility of XRP prices and the current market environment. A common method is to set the stop-loss point at a certain percentage below the price when the TD Sequential indicator issues a sell signal, such as 3% - 5%. Assuming that the price of XRP is $1 when the TD Sequential indicator issues a sell signal, the stop-loss point can be set between $0.95 - $0.97. In this way, when the price drops to the stop-loss point, the stop-loss operation is automatically triggered to avoid further losses.

Another method is to set a stop-loss point based on key support levels. Through technical analysis, identify important support levels in the price trend of XRP, such as previous lows, round numbers, etc. After the TD Sequential indicator issues a sell signal, set the stop-loss point below the support level. If the price falls below the support level, it indicates a fundamental shift in market trend, and exiting with a stop-loss at this point can effectively control risk.

Investors should also reasonably control their positions and avoid over-concentration of investment. It is generally recommended to control the investment position of XRP within a certain proportion of the total funds, such as 20% - 30%, to diversify risks. At the same time, it is important to maintain a good mindset, not be swayed by market sentiment, strictly follow the pre-determined trading strategy and stop-loss plan, and avoid making wrong decisions due to greed or fear, ensuring a stable investment return in XRP trading.

Conclusion

When formulating XRP trading strategies based on the TD Sequential indicator, investors can choose a reasonable selling time based on the indicator’s sell signal, combined with the short-term trend of XRP prices. At the same time, combining the TD Sequential indicator with other technical indicators such as RSI, MACD, BOLL, etc., can analyze market trends from multiple dimensions and optimize trading strategies. In addition, setting reasonable stop-loss points and controlling positions are important means of risk management, helping investors reduce risks and protect fund safety in XRP trading.