XRP: The RevelationHey everyone!
I believe lots of things happened since last year and it is time to provide you an update about XRP!
I have been working really hard to improve my skills and will try to share the most of it through this analysis.
Most of Crypto Traders (CT) believe that XRP is in capitulation and has not finished its downtrend cycle as new lows have been found in August 2019 at nearly $0.24.
However, other indicators such as market cycle, RSI, volume or Elliot Wave (EW) count are telling us another story.
What does it mean and what can we expect next?
A) The Neglected Essential: Volume
So where to look at it? A longer timeframe is always more significant than a lower timeframe. In that sense I will mainly use long-term timeframes for my analysis including Monthly, 10 days, weekly or daily to focus on details.
I would like to start analyzing volume as it represents the activities of traders. In my opinion it is the most important indicator. It should not be ignored.
On the monthly chart
Price and volume are declining – however XRP finds higher lows but volume reaches lower highs.
From volume perspective - It means that sellers are getting purged…It is more and more difficult for bears to short the market…
What does it mean?
Imagine you have a sponge in your hand and you finish cleaning your dishes – what you would like to do is to remove the water from the sponge as much as you can. You will eventually press the sponge, so the water can get out… Then you let it bigger and press on it again to remove the water until it gets dry.
A market maker is more or less like you trying to remove the water from the sponge. So, your money is the water and the sponge is the price on the market, when there is no water anymore, nothing much should happen until a Pizza is delivered and the dishes need to be cleaned again.
I hope it makes sense
On the Monthly Chart:
On the weekly chart – it is exactly the same:
B) Japanese Candles
I believe the Japanese candle is the second most important indicator and will be a catalyst for the next XRP bull run – We usually expect a Hammer or a Doji for a reversal – but there is nothing to see for the moment… I am looking for a nasty candle!
I would like you to pay attention to the size of the wicks vis-à-vis the open and close candles – We can clearly see that they are getting bigger since April 2019:
May / December 2017:
March / December 2016:
C) RSI and MACD
XRP is printing a bullish divergence with the RSI/MACD on the weekly chart – it means that the price is declining but MACD and RSI are producing lower lows:
This is also true on the 10 Days chart:
Please – pay attention to MACD on the 10 days chart–the diagram and EMEAs are producing lower lows– it is bullish.
It is the same on the weekly chart – I am very much looking at the current last bars - if they are able to reverse - it would be a bullish signal.
D) Elliot Wave Count
I believe the last Bullrun from 2013 to 2017 was an impulse wave 12345 (1 is often not counted by CT because it is not visible on Poloniex – I took the data from Coinmarketcap).
If we assume that XRP is bullish, which is objectively true today when looking at the weekly or monthly chart – XRP is moving up:
We can potentially say that wave 4 corrected in April / May 2017 through a contracting triangle as per shown below:
If it holds true – there is a strong likelihood that XRP should end its consolidation in that area as per described by Prechter – (waves C or Z generally correct in wave 4 area).
For XRP – it would correct between $0.13 and $0.28 following this rule….
September 2018 would be called “X” because of
-subdivision inside wave W (I am not going in too much details – maybe later)
-volume of X
-nature of the move – when XRP spikes, it is strong and straight (as wave 1, 3 and 5)
If this thesis is true, Y must be an ABC correction and cannot correct in WXY (however C of ABC can be a WXY as per shown in red).
I believe ABC is therefore a Flat and should normally correct at nearly $0.20 – Interestingly – I have found a confluence of price extension through the current price movement from end of August until beginning of September 2019 at 1.
Moreover, we can clearly see that the previous price moves have already reacted quite well to 0.618 extension at $0.32 /0.786 at $0.272
C would correct at 1 at nearly $0.20
Y of C would correct at 0.618 / 0.65 at nearly $0.20 / $0.205
Little C (not visible here) of C would correct at nearly $0.20
Elliot wave is very practical and powerful but because of alternate counts – I believe I would need more confirmations from other indicators before assuming such scenario.
E) Supports/Resistances and moving average
I am sure that everyone has seen the analysis of MagicPoopCannon - Available here:
I would like to thank him for his work.
I partially agree with him – I like the channel he has drawn but I would like to drag your attention on 2 important points:
1) Data is missing – MagicPoopCannon has only taken what is available on Poloniex and started his trend from X whereas the trend started from wave 1 (available on Coinmarketcap) – In that sense, I have decided to complete the channel.
2) Major supports and resistances are being played here and they strongly influence the current price movement.
Again, my method consists of starting from wave 1 (XRP reached nearly $0.06 on December 2013 to reach wave 5 at nearly $3.40 in December 2017).
I have drawn a parallel trend-line that is interesting enough to be in parallel to wave 4 as well…
To validate this channel, I have created a middle line (red) and assessed if the price was reacting to it as a support or resistance…It clearly does as per shown below.
This trend-line was used as a resistance in 2015:
From 2017 to 2019 – this trend-line has proved to be reacting to XRP price movement more than once as per show below… Could we then assume that XRP could go to $0.07 as it appears to be the next support?
In this chart, you will find all the necessary details to understand my logics…
Yes, it is a possibility but we are not here yet – more battles need to be done before…
Moreover, XRP can definitely move sideways until March May 2021 in order to kiss the blue trendline…
I am not a big fan of this scenario as I am looking for confluences through a variety of methods and indicators.
For the moment, let’s have a look at the intermediary/current supports and resistances and see how XRP is reacting to them…
I have drawn a neckline (purple) from X to the point of resistance/support (red). It was a resistance in 2015 but was broken in May 2017. Hence, could we imagine that the price could now be tested on that support in purple at nearly $0.20/ $0.22?
From wave 3 to wave W (yellow) I have been able to draw a trendline – I consider this trendline important as it is built across point of congestions / accumulations where XRP strongly bounced between May and December 2017.
From wave 5 (yellow) to have (b) (white) I have drawn a second trendline that was used as a resistance – we can see that XRP was strongly rejected in December 2017 as well as in June 2019.
From there, it is easy to identify a descending triangle – which is bullish.
Moreover, the purple trendline previously described is crossing over the support of the triangle at nearly $0.20 / $0.22.
For the moment, everyone is very excited to long this area but I would not, excepted if I get more confirmations.
Indeed, I have drawn a symmetrical trendline in this triangle and found that the price is currently struggling to break that resistance.
It can break it but it would face the resistance of the triangle and will likely be rejected to the bottom of the triangle where the purple neckline is waiting to be tested
Last but not least XRP is moving quite well around EMEA 200 / 233 on the weekly chart. We can see that it is currently playing against the symmetrical neckline in orange but sitting nicely on EMEA 200…
Why not testing EMEA 233 (blue) after being rejected by the symmetrical resistance and generating a nasty candle like a hammer on EMEA 233 (blue)?
F) Time
I believe I could have put this chapter at the beginning of my analysis as time is very important, probably as much as volume.
My method here consisted of using the Market Template developed by Mark Minervini to identify cycles
Stage 1: Neglect Phase: Consolidation
Mark described this cycle has Dead Money where more interesting assets could be traded instead
Stage 2: Advancing Phase: Accumulation
Volume is increasing and shows a good support from institutional investors – this is when price start to spike up.
Stage 3: Topping Phase: Distribution
The price is increasing but also dropping back and forth – this is when the average Joe are entering the market while professionals are selling
Stage 4: Declining Phase: Capitulation: The market is declining while the market makers try to shake all the weak hands
Interesting enough, I have captured the price of XRP through Fibonacci numbers including 988 / 610 / 377 / 233 / 144 and 89.
I have found that a new cycle starts every 233 days – this is confirmed by the top and bottom in 2017 and 2018 but also from August/September 2018 to January 2019
From each end of cycles, I have counted 89 days and found that the cycles described by Mark were perfectly matching inside each of this 89 days cycle. In that sense, we are potentially in the Stage 2: Accumulation Phase if my analysis is correct…
Moreover, counting 144 days from the cycle helped me to identify how the price was moving against a trend-line that are all parallel to each other and where the price of XRP is moving constantly toward it.
This is another confluence/confirmation of the above cycles.
Conclusion
A) XRP is showing a decline of volume while price is reaching higher lows – It is true on the monthly, 10 days and weekly/daily chart. It is bullish in my opinion
B) The wick of the candles are getting bigger – which is similar to prior bullruns – no sign of reversal such as Hammers, Doji or even Tweezer bottom described by some CT yet. I believe if a such candle occurs, it would be a clear bullish signal for the market
C) RSI and MACD are showing some nice bullish divergence on the weekly / 10 days charts. The EMEAs are printing some higher highs while the diagram is almost ready to reverse
D) The EW count is potentially confirming an X wave, which could let us guess that Y could be near through an ABC Flat correction – Found a confluence of price extension at nearly $0.20/$0.22
E) The most frightening part of this analysis is through the supports and resistance where we can see that XRP has been rejected through a major resistance – XRP is in a descending triangle that is crossing over a huge neckline in purple. This is very bullish.
F) Market cycles combined with Fibonacci numbers indicate that we could be in the Advancing Phase: Accumulation.
I will update you if my analysis is liked and shared – please leave comments and follow me on Twitter!
@TheRealArKaiN
