This asymmetric bet on XRP could double your money
- XRP price shows the formation of a W-bottom, suggesting a trend reversal soon.
- Investors can expect the remittance token to rally 120% to $1.35.
- A daily candlestick close below $0.519 will invalidate the bullish thesis for Ripple.
XRP price has painted a massive reversal pattern over the last six months and presents a good buying opportunity. While the outlook is optimistic, investors need to be careful as the volatility of Bitcoin might upset the directional bias of Ripple.
XRP price takes its time
XRP price formed a double bottom at $0.582 in January and May after crashing 55% since November 2021. These moves hint at the formation of a W-bottom pattern, which usually contains a long downswing followed by two retests of a support level after sufficient distance.
The second retest of the floor is likely to be followed by an impulsive move to the starting point. Since the price action resembles the letter “W,” it is termed a “W-bottom” pattern.
For Ripple, the two retests that formed the equal lows at $0.582 were followed by a minor uptick in bullish momentum that formed a local top at $0.917. Therefore, a decisive daily candlestick close above this barrier will confirm the start of a move to $1.35.
From the current position, this run-up would constitute a 120% ascent from the current position. Additionally, this leg will face multiple hurdles at $0.917 and $0.998 before reaching its destination at $1.35.
XRP/USDT 1-day chart
Regardless of the bullishness, a daily candlestick close below $0.519 will create a lower low and invalidate the bullish thesis for Ripple.
Considering that the upside is 120% as compared to the risk, which is less than 15%, this asymmetric bet could be a huge no-brainer.
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
