AAX Intelligence: XRP & BTC — AAX News & Insights
- XRP appears as though it will be heading for $0.27 USD soon. However, XRP will remain bullish if it falls to this level. Overall the indicators are bullish with 7/9 either bullish or neutral, only two being bearish, the MACD and QQE MT4. The current broadening formation is bearish until XRP reaches $0.27 USD. If XRP can then break above the downwards resistance then XRP will continue to trade within the range and potentially higher. However if the $0.27 does not act as adequate support then XRP could see some huge losses in the weeks to come.
- BTC is at a crucial point currently. BTCs ability to hold itself above $11700 and most importantly $10900 USD will determine the rest of the year for BTC and the cryptocurrency market. Luckily for HODLers it appears as though BTC will remain above $10900 and likely $11700 USD, allowing the cryptocurrency to make further moves. Looking at the charts it appears as though a late year bull run, similar to that of 2017 will be on the way for the cryptocurrency market.
XRP price analysis
On 15/02/20 XRP hit $0.34 USD with this so far being the yearly high for the cryptocurrency. From there, XRP proceeded to have a downwards trend before finding support at $0.23 USD. This support help up XRP multiple times. However this support was not strong enough to save XRP from the black swan event which occurred on March 12th, seeing the cryptocurrency drop to as low as $0.11 USD. This huge drop in value saw XRP lose over 68% of its value in only 27 days.
After this huge downturn XRP then found support at $0.13, from this the cryptocurrency was then able to build itself back up again. XRP formed a parallel channel with multiple points of verification. The channel formation saw XRP rise from $0.13 USD towards $0.23 USD, an 80% gain. During this time XRP was very closely following BTC and ETH with an extremely high correlation, as demonstrated below.
This correlation towards BTC continued until XRP broke negatively below the parallel channel.
The break below this channel then began to see the formation of a descending triangle. Due to this descending triangle having a previous upwards trend and a positive breakout the TA pointed towards bullish movement.
This bullish TA was correct, seeing XRP increase over 90% in 91 days. During this period the price of XRP soared, although the trend was broken on 06/08/2020 with that bringing us to the period which we are currently at.
XRP/USD current state of affairs
When looking on the daily chart above, there is no formation or trend line which jumps out. The only thing which does is that XRP is trading within $0.32 — $0.27 USD. In order to get a better view of what is going on let’s have a look at the XRP 2hr chart.
When looking at the 2hr chart we can see that there have been a couple of formations before our current price. The first formation was a symmetrical triangle, with a positive before trend. However unexpectedly the triangle saw a negative breakout.
This negative breakout then saw XRP have a downwards support line until XRP found horizontal support at $0.27 USD. From here XRP then began trading within a parallel channel which XRP recently broke out of in a negative fashion, as demonstrated below.
The negative breakout of this channel has left XRP within its current formation, a slow broadening formation. By looking into the smaller time frames it allows us to find the formation which a cryptocurrency is within or has recently broken out of. By looking at the formation below, it appears that XRP is likely to move back down to the $0.27 USD resistance unless a positive breakout occurs.
Keeping XRP within the range
A move down towards $0.27 USD subsequently from the broadening formation would see XRP stay within its current large trading range. This range is between $0.32 and $0.27 USD of 17.75%.
Set one — BBs, MACD, QQE MT4
BBs — The BBs are currently performing very accurately for XRP. BBs use the 20 day MA as the centre line, this line has acted as support numerous times within recent weeks as indicated with the black arrows below. The recent success of the 20 day MA for holding up the XRP price acting as support should mean that XRP will not fall below $0.27 USD come the end of the broadening formation. After the formation has finished due to the support from the BBs we should see XRP have a positive breakout from the broadening formation.
MACD — The MACD is currently bearish having seen a negative crossover in the positive region with a red histogram. This is extremely bearish from the MACD.
QQE MT4 — The QQE MT4 is bearish. This is due to a negative crossover seen over the 75 region.
Indicators set two — KCs, Heikin Ashi, Ichimoku, SAR
KCs — The candles are currently above the KCs centre line, with this line acting as support a few times since the start of July. Therefore the KCs are currently bullish.
Ichimoku — Personally I find that the Ichimoku cloud is most accurate for finding positive breakouts, that the Ichimoku is relatively ineffective when there is a threat of a bearish downturn. However the Ichimoku technically remains bullish.
SAR — The SAR has recently flipped from being above the candles to being below them. This is a bullish signal, indicating that the momentum is now with the bulls again rather than the bears.
Heikin Ashi — The Heikin Ashi is somewhat neutral at the moment. Although the candle is red there is little to suggest that this will be sustained. Alongside this if this is a lone red candle, with the next few green then the Heikin Ashi will be very bullish.
Indicators set three — PnF, PPs, SMA 20/6
PnF — Currently the PnF is bullish. This is due to the cloud and candles being green, alongside a buy signal for a rising bottom being seen recently.
PPs — The PPs are currently bullish and acting as positive support for XRP. XRP is in the upper regions of the PPs, located in the R1 section.
SMAs 6 & 20 — There has recently been a positive crossover for the 6 day SMA and the 20 day SMA. This saw the 6 day move over the 20 day — bullish.
XRP/USD Indicators table
XRP price analysis conclusion
XRP appears as though it will be heading for $0.27 USD soon. However, XRP will remain bullish if it falls to this level. Overall the indicators are bullish with 7/9 either bullish or neutral, only two being bearish, the MACD and QQE MT4. The current broadening formation is bearish until XRP reaches $0.27 USD. If XRP can then break above the downwards resistance then XRP will continue to trade within the range and potentially higher. However if the $0.27 does not act as adequate support then XRP could see some huge losses in the weeks to come.
XRP price targets
Bullish price targets
$0.33 USD + 13% — In order for this to occur XRP would need to see a bullish breakout of the slow broadening formation. The likelihood of this occurring is high.
$0.37 USD + 29% — For XRP to reach $0.37 USD XRP would need to break above the $0.33 USD resistance. This level has provided resistance multiple times and could prove to be a hard nut to crack for XRP. The likelihood of this occurring is low.
$0.43 USD + 48% — XRP will likely not reach this level, however it is the next resistance level after $0.37 USD. The likelihood of $0.43 USD being reached is extremely low
Neutral price targets
$0.27 USD — 4% — If XRP does not make a bullish breakout of the broadening formation soon then $0.27 USD will be the next stop for XRP. However if XRP hits this level then there is still the possibility of XRP being both bullish and bearish. The likelihood of $0.27 USD being hit is extremely high.
Bearish price targets
$0.23 USD — 21% — If the $0.27 USD level does not provide significant support then XRP will likely freefall towards the $0.23 USD level. This is due to the speed of the previous move, the lack of resistance levels between $0.23 and $0.27 USD. The likelihood of $0.23 USD being hit is medium.
$0.21 USD — 28% — If the $0.23 USD is hit and broken below then the next resistance level is $0.21 USD. Due to the current bullish indicators and stiff support at $0.27 USD and $0.23 USD, the likelihood of this being hit is extremely low.
Price targets table
BTC has recently been somewhat uncertain, undecided on which direction it wishes to move next. After BTCs huge rise from $9000 USD to $12000 USD the cryptocurrency has spent most of August trading between $11000 USD and $12000 USD. However during this time it seemed as though BTC was ready for a move up after a significant move above the ascending triangle. The breakout was significant and the formation had numerous validation points. This would have likely caught out many traders because as demonstrated below, this was a failed breakout for BTC.
The attempted breakout failed to maintain its upwards momentum and has now led to BTC going back into the triangle and breaking below the formation. Therefore BTC has broken below the upwards support which was holding the price up. So if BTC has broken its upwards support, what is the next stop for BTC?
The next significant level of support for BTC is currently $10900 USD. This support level has acted as both support and resistance multiple times for BTC as demonstrated in the examples below.
If BTC moves down to $10900 USD it currently appears very unlikely that BTC will fall lower than this. A fall down to $10900 USD would keep BTC in its trading range since the start of August. BTC would also remain within the long term parallel channel which it has been in since March, as demonstrated below.
BTC appears likely to be in the stage of the 4th wave. Unless a breakout of the channel occurs then BTC will remain within it, we could see a similar situation which was seen between May towards mid — July. This would see BTC heavily stagnate before hitting the upwards support of the parallel channel. If this scenario occurs, once this is hit we could see another bullish run before the end of year.
There is currently the general assumption that the movements since March have been seen in an impulsive wave rather than a corrective wave. However if the movements since March are in fact a corrective wave then BTC and the rest of the cryptocurrency market will see huge losses in the coming weeks. Although this is very unlikely as this wave is showing the characteristics of an impulsive wave.
BTC/USD 1hr chart
There is the definite possibility that BTC may not reach $10900 USD. This is due to recent developments on the 1hr chart. BTC has broken above a downwards parallel channel. The break is huge due to the high significance of the downwards resistance of this channel. In this situation the central PP has acted as support at $11700 USD.
If BTC can use the $11700 USD level as a springboard then we may see BTC attempt to break above $12300 USD again. Although if BTC falls below the central PP then BTC will enter the bearish section of the PPs; BTC is therefore at a crucial level currently.
BTC/USD curves and Heikin Ashi
Looking at recent patterns of the Heikin Ashi, it appears as though the $11700 USD level will act as resistance. This is due to a 2/6/2/6/2 pattern occurring. With the $11700 USD level acting as a blockade, if the next candle is green then we should expect a positive few days next week — even potentially a break of $12400 USD.
However, there is one concern about the BTC Heikin Ashi currently and that is a curve off. After seeing BTC have a huge upwards curve trend, with the cryptocurrency seeing an array of green candles, BTC has since shown signs of momentum loss as demonstrated below.
This adds backing to the need for a green candle after today’s red Heikin Ashi, seeing $11700 USD continue to act as support, otherwise the Heikin Ashi will turn bearish.
Indicators set one — PPs, PnF, Gann HL, MACD
PPs — The PPs for BTC on the daily timeframe are currently bullish. They are bullish due to BTC being in the upper region, pushing the R1 line and north of the centre pivot. However BTC has found resistance at the upper PP and could easily see a move down towards the central pivot for support.
PnF — The PnF is currently bullish with the cloud and candles being green, alongside a recent signal for a simple buy due to a rising bottom being seen.
Gann HL — Again there is another bullish indicator, the Gann HL. This indicator has been bullish since the 7th of July and has seen BTC rise from $8800 USD to its current price. There is still a significant gap between the candles and the Gann HL, however there does appear to be a slight slowdown occurring.
MACD — Just like XRP the MACD for BTC is currently very bearish. There has been a negative crossover in the upper regions of the MACD which has also led to a red histogram.
Indicators set two — BBs, SMA 6 &20, WWV, BBs/MACD
BBs — The Bollinger Bands are currently bullish. BTC has found support with the 20 day MA, keeping BTC in the upper regions of the BBs. The BBs are currently contracting, this may be suggesting that a period of sideways trading is soon to come.
SMA 6 & 20 — Bullish, the SMA 6 & 20 have seen a positive cross over with the 6 day SMA moving above the 20 day SMA.
WWV — The WWV has recently turned bearish, with the start of a new red wave in play. If this wave is however short due to BTC being pushed up by other indicators and formations then the WWV will quickly turn bullish.
MACD/BBs — The MACD/BBs indicator is currently bearish. There is a red cloud with a failed attempt to push the cryptocurrency back up seen before this cloud.
BTC/USD price targets
Bullish price targets
$12450 USD + 6% — $12450 USD is definitely a realistic target for BTC in the coming week. BTC could use the indicators to carry itself towards this level as it still has a slight bullish bias. However a break above $12450 currently looks in doubt. The likelihood of BTC hitting $12450 USD is high.
$13500 USD + 14.5% — BTC currently is bullish, although not that bullish. There are key indicators such as the MACD which are currently bearish and with the curve off seen with the Heikin Ashi it appears that BTC does not have the momentum to make a huge +14.5% move towards $135000 USD. The likelihood of $13500 USD being hit is very low.
Neutral price targets
$12000 USD +2% — BTC currently appears highly likely to hit $12000 USD in the coming days. The recent breakout on the 1hr chart from the parallel channel, alongside $11700 USD acting as solid support, the bullish indicators and the Heikin Ashi 2/6/2 pattern all point towards $12000 USD being hit. The likelihood of $12000 USD being hit is almost certain. A move to $12000 USD would neither confirm a bullish or bearish scenario.
Bearish price targets
$11300 USD -3% — In order for BTC to hit $11300 USD BTC would need to break below $11700 USD. This level will be hard to break below, although is not a major resistance level for BTC so is possible. The bearish scenario also has the support of the MACD, a typically very reliable indicator. The likelihood of this occurring is medium.
$10900 USD -7% — If BTC falls to $11300 USD it would not take much for it to fall towards $10900 USD. If BTC hits $11300 USD then many of the bullish indicators will turn bearish such as the BBs, SAR etc. The likelihood of BTC hitting $10900 USD is medium.
$10000 USD -15% — I would be shocked if BTC hit $10000 USD in the coming weeks. This is partially due to the strength of the $10900 USD support level but also that it would confirm that the recent wave is corrective rather than impulsive. However stranger things have happened in crypto this year… Likelihood is extremely low.
BTC is at a crucial point currently. BTCs ability to hold itself above $11700 and most importantly $10900 USD will determine the rest of the year for BTC and the cryptocurrency market. Luckily for HODLers it appears as though BTC will remain above $10900 and likely $11700 USD, allowing the cryptocurrency to make further moves. Looking at the charts it appears as though a late year bull run, similar to that of 2017 will be on the way for the cryptocurrency market.
This intelligence report is for marketing and educational purposes only. The views, analyses and projections are based on independent research, but cannot be taken as a form of investment advice.
Originally published at https://blog.aax.com on August 21, 2020.