Welcome to my look at XRP vs BTC on the daily log chart!
First a bit of history! Back on the 9th of March we finally broke upwards and out of the long term dotted downtrend line that we have been in since early January.
This break out wasn’t sustained however and we then formed a bullish smaller falling wedge reversal pattern from which we broke out to the upside of back around the 10th of April.
We then we have trending higher in an ascending broadening wedge pattern. As you may or may not be aware, ascending broadening wedges tend to breakout in the direction of the previous price trend; acting as continuations of this move – so in this instance it was expected to be a breakout to the downside and that is exactly what occurred today. Generally, when these downside break occurs the pattern is very trustworthy.
So where do we currently sit? Well today we have fallen through the 12 EMA which offered little to no resistance, and look set to test the 26 EMA by today’s close. Pending whether or not we find any support here will help us to determine our next trading move.
We also need to consider what our other technical indicators are telling us to get the full story. The MACD is looking like it is about to cross bearish which is not a good sign. The upward momentum we were building over the last week is fizzling out helping support a bearish view. The strength of the uptrend on the RSI has also waned, though we are not overbought nor oversold. The Aroon Up is currently at around 64 and is falling. Aroon Down is still well below 50 though if the Up crosses below 50 then it’s an indication the bulls are losing the edge (in which case we will see the Aroon Down start to climb).
If the EMA 26 does not hold then there is a chance we could fall to the green dashed support level. We have historically had support in this area so it is likely to hold and create a bounce. This is therefore a great buy zone.
Now despite this bearish outlook in the short term, we could also be forming a bullish cup and handle pattern as shown in purple. If this pattern plays out then we would see a target of around 0.000136417.
So what to do right now? I would wait and see if the 26 EMA gives us enough support. If we fall through it by tomorrows close, then I would be looking for a buy area around the green dashed support line. And in the next day or two it looks like our cup and handle pattern is holding, I would wait for a confirmed breakout of the purple handle trend line and then set stepped sell orders leading up to the 0.000136417 target zone.
As always DYOR and trade safe!
Cheers
