The Market Goes To Extremes (XRP and XLM)
Updated
Here we go. My first legitimate alt/btc long setup in a while. I've stopped posting these because the ratios just kept going lower and all the potential stop loss areas were hit. My last XLM setup was to have a stop loss around 1530, but to target a break of the wedge. I said that if XLM failed again at the wedge resistance, it could head all the way down to the wedge support, which was close to 1000 at the time. Since then, altcoins like XLM and XRP (and even ETH) have dumped to the lowest levels against Bitcoin that could still be reversal territory, in my opinion. XLM is finally at the bottom of the wedge again, and XRP has finally hit its second long term uptrend line (dark blue). Interestingly, XRP has drifted lower again towards major USD long term support, as I outlined in my most recent XRP/USD analysis. I did actually expect some more sideways/down on that pairing before any major attempt to break out.
Anyway, I think the chances for XRP and XLM to bounce on their ratios have significantly increased. Bitcoin dominance has reached roughly 66.7%, which is a perfect 2/3rds of the market share. Thirds are very important psychological proportions, even in art. We also have some pretty major bullish divergences, but those have mostly been ignored over the last several months. However, I HAVE noticed a lot of Bitcoin profit-taking over the last couple of days. I've been speculating that at least some of those huge margin long profits could funnel into altcoins. So far (particularly with the Bitcoin dump today) the market is still actually mirroring the price action in June-July 2016. You can read more about that in my other recent posts. Now, it's very possible that even if XLM and XRP bounce now, they won't break their downtrends yet. The reason for this is that XRP and XLM didn't make significant moves until after Bitcoin got back to its previous all-time high in early 2017. That doesn't stop this from being a decent trading opportunity.
The XLM setup is simply to buy and target the wedge resistance (currently around 1200). If it breaks out of the wedge on large volume, I'd expect somewhat of a parabolic move that could even take XLM towards 2900. For XRP, the target would be the downtrend resistance (pink), currently around 5200. If that falls, then it could hit the previously broken uptrend (orange) around 6700ish. Obviously if that breaks as well, I think XRP could go on one of its trademark quick parabolic moves. For now, I expect those downtrends to serve as powerful resistance, until Bitcoin possibly breaks its all-time high. I'd love it if they broke out sooner, but the market has been really testing the patience of altcoin holders.
Obviously, a stop loss would probably be wise, set below these major support levels (wedge support for XLM and dark blue support for XRP, or below 2600-2700).
This is not financial advice. Just a couple of setups I'm seeing, and I'm curious to see how this plays out.
Anyway, I think the chances for XRP and XLM to bounce on their ratios have significantly increased. Bitcoin dominance has reached roughly 66.7%, which is a perfect 2/3rds of the market share. Thirds are very important psychological proportions, even in art. We also have some pretty major bullish divergences, but those have mostly been ignored over the last several months. However, I HAVE noticed a lot of Bitcoin profit-taking over the last couple of days. I've been speculating that at least some of those huge margin long profits could funnel into altcoins. So far (particularly with the Bitcoin dump today) the market is still actually mirroring the price action in June-July 2016. You can read more about that in my other recent posts. Now, it's very possible that even if XLM and XRP bounce now, they won't break their downtrends yet. The reason for this is that XRP and XLM didn't make significant moves until after Bitcoin got back to its previous all-time high in early 2017. That doesn't stop this from being a decent trading opportunity.
The XLM setup is simply to buy and target the wedge resistance (currently around 1200). If it breaks out of the wedge on large volume, I'd expect somewhat of a parabolic move that could even take XLM towards 2900. For XRP, the target would be the downtrend resistance (pink), currently around 5200. If that falls, then it could hit the previously broken uptrend (orange) around 6700ish. Obviously if that breaks as well, I think XRP could go on one of its trademark quick parabolic moves. For now, I expect those downtrends to serve as powerful resistance, until Bitcoin possibly breaks its all-time high. I'd love it if they broke out sooner, but the market has been really testing the patience of altcoin holders.
Obviously, a stop loss would probably be wise, set below these major support levels (wedge support for XLM and dark blue support for XRP, or below 2600-2700).
This is not financial advice. Just a couple of setups I'm seeing, and I'm curious to see how this plays out.
Note
Here is the perfect rejection for XRP at the blue trendline: Note
XLM should not close a daily candle below here: Note
Interesting that the last 2 times XRPBTC painted 4 daily green candles, a pretty massive move followed: Note
Looks like 5K sats would be the initial target for a move up from here: Note
I ended up extending the blue support line for XRP a little further. I ended up having some wiggle room. Since the 2400 area has held rather well, we can perhaps assume that the trend isn't lost JUST YET. We really need to see what happens over the next week. In addition, XLM has bounced BEFORE the bottom of the wedge for the first time. Note
Well..first time since December. I guess it doesn't really mean anything. Also, the ultimate oscillator is showing a sell signal, but I think it was thrown off a bit by the flash crash. Note
This took a while to play out, but for what it's worth, XRP and XLM have finally started to move up from what could indeed be their bottoms.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.