XRPLong
XRP Bounce Behaviour Analysis
There are a total of three different factors we will consider in this analysis. Each of them have shown correlation with XRP price in at least three occasions during the last couple of months.
1. Price:
XRP has used two price support trendlines since December 2018. The first one being at the ~0.285 USD level and the second one starting after the May 2019 breakout at the ~0.375 USD. The first one was used three times before jumping to a new support level on May, while the second one has just recently bounced its third time.
Notice the second trendline was previous resistance, which suggests the next support level should be at the 0.49-0.51 USD range if this is repeated once again.
If the current support line is broken, the previous support trendline will keep the price above the 0.30 USD level. However, this is an unlikely scenario.
2. RSI:
This is likely the most important indicator in this analysis for the clear correlation it has with price. This section is divided into two sub-sections to improve readibility.
2.1 RSI - Support:
There are two support trendlines in the RSI, one has been going on since December 2018 while the second one was recently created after the May breakout (~2 month lifetime). All have proven to hold individually in at least 3 previous occasions however, the important thing to note here is that these support trendlines have now merged, which means the combined support is unlikely to be broken.
2.2 RSI - Resistance:
Since April, XRP has obeyed the RSI oversold level immeadiately. Therefore, this is likely one of the best indicators traders should use to exit their positions at the moment. Traders should look for an exit at the 62-67% RSI range.
3. Long Ratio:
Having a market wide long to short ratio is a complex task as the major margin exchanges such as BITMEX do not provide the necessary data. This ratio however uses BITFINEX margin data to to estimate the total sentiment.
On the daily timeframe and going back to late April, we can see XRP has bounced each time the live long ratio has touched or very shortly exceeded the 30 day long ratio moving average.
Furthermore, notice the ratio has recently reached the 20.0 points level, which means that for every 1 USD short there is a 20 USD long. Although some may believe this overextension from the equilibrium value of 1.0 should be considered as a contrarian indicator, the last time XRP reached this level (November 2017) there was a bull run from 0.25 USD to ~3.00 USD shortly after.
1. Price:
XRP has used two price support trendlines since December 2018. The first one being at the ~0.285 USD level and the second one starting after the May 2019 breakout at the ~0.375 USD. The first one was used three times before jumping to a new support level on May, while the second one has just recently bounced its third time.
Notice the second trendline was previous resistance, which suggests the next support level should be at the 0.49-0.51 USD range if this is repeated once again.
If the current support line is broken, the previous support trendline will keep the price above the 0.30 USD level. However, this is an unlikely scenario.
2. RSI:
This is likely the most important indicator in this analysis for the clear correlation it has with price. This section is divided into two sub-sections to improve readibility.
2.1 RSI - Support:
There are two support trendlines in the RSI, one has been going on since December 2018 while the second one was recently created after the May breakout (~2 month lifetime). All have proven to hold individually in at least 3 previous occasions however, the important thing to note here is that these support trendlines have now merged, which means the combined support is unlikely to be broken.
2.2 RSI - Resistance:
Since April, XRP has obeyed the RSI oversold level immeadiately. Therefore, this is likely one of the best indicators traders should use to exit their positions at the moment. Traders should look for an exit at the 62-67% RSI range.
3. Long Ratio:
Having a market wide long to short ratio is a complex task as the major margin exchanges such as BITMEX do not provide the necessary data. This ratio however uses BITFINEX margin data to to estimate the total sentiment.
On the daily timeframe and going back to late April, we can see XRP has bounced each time the live long ratio has touched or very shortly exceeded the 30 day long ratio moving average.
Furthermore, notice the ratio has recently reached the 20.0 points level, which means that for every 1 USD short there is a 20 USD long. Although some may believe this overextension from the equilibrium value of 1.0 should be considered as a contrarian indicator, the last time XRP reached this level (November 2017) there was a bull run from 0.25 USD to ~3.00 USD shortly after.
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