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Ripple (XRP) Price Analysis: On A Bull Run
Over the last three days, Ripple (XRP) has made a very strong upward move breaking out of an asymmetric triangle pattern that had been forming since early June 2017.
We pointed out this technical analysis setup in our last analysis of Ripple.
The price action has all the textbook characteristics of a classic triangle breakout.
Within the triangle pattern price approached the upper resistance trendline four times, and the lower support trend line five time over a period of about six months.
The breakout to the upside seemed almost inevitable, and was very predictable.
The breakout took place at $.27759 on December 12th, and traded up with very strong volume to a high of $.88268 on December 14th, an increase of about 218%.
The Daily chart below (Chart #1) shows the triangle pattern, and the subsequent breakout.
Chart #1: Ripple Daily
Breakouts of the type are typically followed by a short-term retracement and price consolidation before continuing on to make at least one new high.
This is usually the result of short-term traders taking profits as their trailing-stops are activated, which is then followed by traders that missed the initial move and are waiting for a favorable price dip on which to enter long and try to make some profits from the price move.
Chart #2: Ripple 15-Minute
The 15-minute chart (Chart #2) above is indicating that momentum to the upside remains strong.
The hand pointers show how price dips in which price goes below the 9-bar moving average, and then returns and closes above the moving average are followed by price increases accompanied by spikes in volume, as clearly shown in the shaded area.
The current price dip exhibited on the 15-minute chart has price retracing below the 38% Fibonacci retracement level (as shown in Chart #1), and has followed the previous patterns of trading below the 9-bar moving average on the dip, and then bouncing above the moving average.
This is a favorable entry point for those traders that missed the initial move.
Favorable news about Ripple should also be taken into account.
In an effort to ensure the stability of total supply of Ripple, in May 2017, the company reveal plans to place 55 billion XRP Ripple tokens in a cryptographically-secured escrow account.
Ripple revealed that it has completed its plan to create 55 smart contracts that will hold 1 billion XRP Ripple each.
Every month, one of these contracts will expire, making the associated digital tokens available for use.
This is the type of news that appeals to long-term investor, and may be what is driving Ripple’s strong upward price action.
We will be watching closely.
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
Image courtesy of coinmarketcap.com