A U.S. judge ruled that the sale of XRP tokens on exchanges and through algorithms does not constitute investment contracts, which was celebrated by token enthusiasts. The news caused many major cryptos to experience a sharp increase.

Following XRP’s parabolic rise, the crypto started to consolidate mostly sideways on decreasing volume and lessening volatility. The horizontal move caused XRP to form a series of five inside bars.

An inside bar pattern indicates a period of consolidation and is usually followed by a continuation move in the direction of the current trend.

An inside bar pattern has more validity on larger time frames (four-hour chart or larger). The pattern has a minimum of two candlesticks and consists of a mother bar (the first candlestick in the pattern) followed by one or more subsequent candles. The subsequent candle(s) must be completely inside the range of the mother bar and each is called an "inside bar."

A double, or triple inside bar can be more powerful than a single inside bar. After the break of an inside bar pattern, traders want to watch for high volume for confirmation the pattern was recognized.

Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The XRP Chart: XRP’s consolidation with multiple inside bars has helped the crypto to drop its relative strength index (RSI) down from about 89% to 73%. When a stock or crypto’s RSI measures above 70% it is overbought, which can be a sell signal for technical traders.

Read Next: Top Market, Crypto, Tech and Politics Headlines Today While US Was Sleeping

Photo: Shutterstock