Avoid the Void! Price Depreciation & Low Volume = Coin Flip

2018年6月6日

After charting both Bitcoin and Ethereum, Ripple comes off as a cryptocurrency participant that was swept up to insane, out of range levels. It's really hard to take it seriously given that there is an absolute VOID of levels of any kind between its first resistance level prior to the explosive breakout, and the current, reasonable resistance level. Raising this second level any higher makes the void even deeper and more unsettling, so do so at your own risk and please take it into account.

Prior to the "market manipulation" moment, Ripple was on a very flat, very narrow and slow trend upwards. When the "moment" hit all coins (around the time that BTC was peaking) Ripple shot up. Straight up. Not even parabolic, just straight up. There was no opportunity for Ripple to figure out what it really cost or where it was going to try and go. The top of the bubble came and went with the mania and slowly started winding straight back down. You could attribute part of it to alt-coin rotation (taking gains from one coin, rolling them into another on the rise, rinse and repeat) to Ripple's fate, but it's also had some media attention and support from public entities.

I wouldn't say Ripple has crashed yet, but it has breached a secondary resistance line that formed recently, which didn't exist before. Again, a very dangerous and speculative characteristic for its market. Multiple downward wedges formed while it dropped and they are all playing out alongside a Death Cross that formed around mid-April. Not a great sign when looking for support and upward momentum. When looking at the end of the wedges, there are two channels that can be formed.

The first channel is the "Generous" channel that takes more of the recent price action into account versus the earlier development of the coin. In this case, Ripple is trying to cling onto the lower trend line, but the wedges and very low volume indicate a move lower is feasible and not easily out of the question. If we draw a lower, more rational channel based off the initial development and a reasonable portion of the hyper growth area that is decomposing, we get a channel that is narrow and razor-like, that mimics the initial trend development. Here we can find some OK support, but recent prices have bounced off the bottom of this channel and we, once again, have the wedge and volume issues to deal with.

Being under both the 50 and 200 DMA, and having broken the newly formed secondary line shows weakness at current levels and abnormal potential for Ripple's price to stay depressed. A test area can be formed that will determine how Ripple moves once it breaks out of its wedge formation. If it moves back up into either channel, it's not all clear, but at least it's not detrimental. The real danger and why I'm Neutral on Ripple is that if the price decides to drop on heavy Sell volume, it can break its second resistance line and then fall into an empty void that has no prior levels, history, trends, etc. I believe this would be a falling knife moment that would hopefully end on the Mean Trajectory line that can be formed from Ripple's initial, normal development.

In an absolute apocalypse, you'd see the price fall down to the first, established resistance line. However, that level doesn't take into account the very real work Ripple has executed, public awareness and a community that honestly believes in the coin. Therefore, I dubbed it a Mt. Gox level crash, in case Ripple did something outrageous to push the price down to that level. If Ripple breaks upward, there's a nice area I've circled in November (Midterms time) that has multiple trends and levels intersecting that show a $1.00-1.10 area that could be an achievable sweet spot for Ripple. Again, proceed with caution, as XRP could honestly go either way very soon. Influence from BTC and other coins could def help prop it up, but again, that's a dangerous position to be in, even speculatively, when you depend on factors outside a coin's own.