Ripple is the 4th largest cryptocurrency by market cap and just like other big shots, the rally is on. In this pair though, current prices provide a wonderful buy opportunity given the pace at which it has been expanding over the past few days.
The trend in the weekly chart is clear. Bulls are in charge and after last week closed as a bull, a 3 bar reversal candlestick pattern otherwise known as Morning Star pattern was confirmed. This is especially important considering that price action reversed from around the 61.8% Fibonacci retracement level and as history shows, reversal from those levels often lead to a retest of the recent highs which in our case is May’s highs of $0.458.
We also note that we are trending within a wedge and there is a minor resistance marked by last week’s highs at around $0.271. The ultimate resistance is defined by the upper trend line at around $0.32.
In the daily chart I notice two things that should help buoy buyers. The first is the series of higher highs which is rightly complemented by the increasing buy momentum as stochastic shows. Secondly, we check out how price itself is moving relative to the middle band after that strong close and break above the wedge on November 16.
As long as momentum remains this way, chances of our first level of resistance at $0.256 being broken is high. Furthermore, remember our short term high lows have been clearly marked by November 16 and therefore logic demands that our immediate bull target be our second level of resistance at $0.32.
Given the way other cryptocurrencies have been rallying, it’s only fair to say that Ripple prices are fairly priced. The weekly chart trend is bullish so we only take long positions in the 4HR chart when the right opportunities presents itself.
In the 4HR chart, it is obvious that prices are moving within an ascending channel with a buy signal printed by the stochastics.
Trading this pair is simple and any break above the resistance trend line of this ascending channel means a continuation of a buy trend. For this reason we place a buy stop above November 25 highs at $0.258.
However, if prices close below the 20 period MA and the support trend line, we wait until a buy signal is place and cancel our pending order at $0.258 as we seek to enter at better prices.