Ripple is at the verge of completing a triangle price pattern but has one more leg to make to the upside. The following insight is based on technical analysis.
May 07, 2019 | AtoZ Markets – The XRP price is giving up most of Monday’s gain. Last week, price rallied to 33 cents to complete a 17% gain from the 28.5 cents low. While Bitcoin is adding to its market dominance and other major cryptos being dragged along, Ripple has been left behind. While still maintaining its position as the third-ranked crypto on Coinmarketcap based on market capitalization, XRP has dropped to its lowest price in 2019.
On 15th December, price bounced off the 28.5 cents low. The same level was tested late January and price bounced again. For the third time on 25th April, price bounced off this level once more and it quickly became an important support level. Will this level hold if the price comes knocking for the 4th time? A rare scenario where Bitcoin is gaining new highs while Ripple makes new lows is surfacing. This is because the price patterns of the two are diverging. While Bitcoin climbs with an impulse wave pattern in view, Ripple goes nowhere with a clear bearish sideways pattern in view.
XRPUSD completing a 19-weeks triangle?
Last week, we spotted a sideways triangle on Ripple which started on 15th December. The triangle pattern is contrasting in nature and the preceding trend is clearly bearish. The chart below was used to illustrate this in the last update.
Wave (e) was expected to continue to 36 cents before a probable bearish breakout. Since this update, XRP rallied to 33 cents and dropped back to 31 cents. The triangle has now extended by another week.
Triangle patterns, according to Elliott wave theory, have five sub-legs each completing a simple or complex zigzag pattern. Wave (e) in this case could complete a double zigzag pattern. This means that there might be a retest of 30 cents before a surge to 35 cents or below to complete wave (e). If price surges further to reclaim 38 cents or even move above, the bearish triangle will be invalidated and the bias will turn bullish. However, if the price drops below 35-36 cents and breaks below 28.5 cents low, Ripple will be expected to hit far lower prices than what was seen in 2018. Afterwards, a bullish resurgence might happen.