Elliott Wave Analysis on Ripple (XRP/USD)
Major Wave Structure
1. Primary Waves
• W-X-Y-XX-Z: The chart begins with a complex corrective structure, which is common in Elliott Wave Theory to describe prolonged corrective phases.
• 1-2-3-4-5: Following the complex correction, an impulsive wave structure is apparent.
2. Subwaves
• Each primary wave consists of smaller-degree waves, identified using numerical (1, 2, 3, 4, 5) and alphabetical (A, B, C) labels.
Detailed Breakdown
Corrective Phase (W-X-Y-XX-Z)
• Wave W: Indicates an initial corrective phase, typically forming a zigzag pattern.
• Wave X: A connecting wave that can take the form of a triangle, flat, or zigzag.
• Wave Y: Another corrective wave similar to wave W.
• Wave XX: Another connecting wave, similar in structure to wave X.
• Wave Z: The final corrective phase in the complex structure.
Impulsive Phase (1-2-3-4-5)
• Wave 1: Initial impulsive wave marking the beginning of a new trend.
• Wave 2: Corrective phase, typically retracing part of wave 1.
• Wave 3: The strongest and usually the longest wave, often extending to 161.8% of wave 1.
• Wave 4: Another corrective wave, usually less severe than wave 2.
• Wave 5: Final wave in the impulsive phase, often displaying divergence with indicators like MACD or RSI.
Fibonacci Levels
• Fibonacci retracement levels are crucial in identifying potential reversal points and are marked on the chart:
• 23.6% Retracement: Around 0.58025, indicating a potential resistance level during a pullback.
• 38.2% Retracement: Near 0.54160, suggesting a significant support level.
• 50% Retracement: Often considered a strong support or resistance level, located around 0.51587.
Future Projections
1. Current Scenario
• The chart indicates that Ripple is currently forming wave (3), which is expected to continue upwards, with potential resistance around 0.65795.
2. Wave (4) Projection
• After completing wave (3), a corrective phase (wave (4)) is likely. This wave could retrace to the 38.2% or 50% Fibonacci levels, around 0.54160 or 0.51587, respectively.
3. Wave (5) Projection
• Following wave (4), the upward trend is expected to resume in wave (5), potentially targeting new highs above the previous peak of wave (3).
Conclusion
• Short-Term: Expect continued upward movement in wave (3), with resistance around 0.65795.
• Medium-Term: A corrective phase (wave (4)) is expected, targeting support around 0.54160 or 0.51587.
• Long-Term: After wave (4), the upward trend should continue in wave (5), potentially reaching higher levels.
Trading Strategy
• Entry: Consider entering long positions near the end of wave (4), using Fibonacci support levels around 0.54160 or 0.51587 as potential entry points.
• Stop-Loss: Place stop-loss orders below the 61.8% retracement level to protect against deeper corrections.
• Targets: Set initial profit targets around the resistance level of wave (3) and adjust positions based on the development of wave (5).
1. Primary Waves
• W-X-Y-XX-Z: The chart begins with a complex corrective structure, which is common in Elliott Wave Theory to describe prolonged corrective phases.
• 1-2-3-4-5: Following the complex correction, an impulsive wave structure is apparent.
2. Subwaves
• Each primary wave consists of smaller-degree waves, identified using numerical (1, 2, 3, 4, 5) and alphabetical (A, B, C) labels.
Detailed Breakdown
Corrective Phase (W-X-Y-XX-Z)
• Wave W: Indicates an initial corrective phase, typically forming a zigzag pattern.
• Wave X: A connecting wave that can take the form of a triangle, flat, or zigzag.
• Wave Y: Another corrective wave similar to wave W.
• Wave XX: Another connecting wave, similar in structure to wave X.
• Wave Z: The final corrective phase in the complex structure.
Impulsive Phase (1-2-3-4-5)
• Wave 1: Initial impulsive wave marking the beginning of a new trend.
• Wave 2: Corrective phase, typically retracing part of wave 1.
• Wave 3: The strongest and usually the longest wave, often extending to 161.8% of wave 1.
• Wave 4: Another corrective wave, usually less severe than wave 2.
• Wave 5: Final wave in the impulsive phase, often displaying divergence with indicators like MACD or RSI.
Fibonacci Levels
• Fibonacci retracement levels are crucial in identifying potential reversal points and are marked on the chart:
• 23.6% Retracement: Around 0.58025, indicating a potential resistance level during a pullback.
• 38.2% Retracement: Near 0.54160, suggesting a significant support level.
• 50% Retracement: Often considered a strong support or resistance level, located around 0.51587.
Future Projections
1. Current Scenario
• The chart indicates that Ripple is currently forming wave (3), which is expected to continue upwards, with potential resistance around 0.65795.
2. Wave (4) Projection
• After completing wave (3), a corrective phase (wave (4)) is likely. This wave could retrace to the 38.2% or 50% Fibonacci levels, around 0.54160 or 0.51587, respectively.
3. Wave (5) Projection
• Following wave (4), the upward trend is expected to resume in wave (5), potentially targeting new highs above the previous peak of wave (3).
Conclusion
• Short-Term: Expect continued upward movement in wave (3), with resistance around 0.65795.
• Medium-Term: A corrective phase (wave (4)) is expected, targeting support around 0.54160 or 0.51587.
• Long-Term: After wave (4), the upward trend should continue in wave (5), potentially reaching higher levels.
Trading Strategy
• Entry: Consider entering long positions near the end of wave (4), using Fibonacci support levels around 0.54160 or 0.51587 as potential entry points.
• Stop-Loss: Place stop-loss orders below the 61.8% retracement level to protect against deeper corrections.
• Targets: Set initial profit targets around the resistance level of wave (3) and adjust positions based on the development of wave (5).
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.