• XRP price action develops an effective bear trap.
  • Short sellers and weak hands will experience some significant pain as XRP rallies.
  • Extremely bullish Point and Figure pattern present a 6:1 reward/risk setup.

XRP price has experienced some major selling over the past six trading days. Sellers have promptly sold off  Ripple upon hitting the $1 level, pushing XRP lower by as much as 20%. However, the bearish price action has developed into a powerful buying opportunity.

XRP price to rally more than 30% to the $1 value area

XRP price is currently testing the neckline breakout from a previous head-and-shoulders pattern on the $0.01/3-box reversal Point and Figure chart. The Point and Figure pattern that has developed is a Spike Pattern. The Spike Pattern is an aggressive reversal strategy with an entry immediately on the 3-box reversal of the current O-column.

The theoretical trade setup for XRP price is a buy stop order at $0.86, a 4-box stop loss at $0.82, and a profit target at $1.10. This trade setup represents a 6:1 reward for the risk. In addition, a two to three-box trailing stop would help protect any implied profit post entry.

The buy stop order is at $0.86 at the time of publication, but the current O-column could move lower. If that occurs, then the entry and the stop loss also move lower. For example, if XRP price moves three more Os lower to $0.79, the buy stop order would shift to $0.82 and the stop loss to $0.79. The profit target remains the same.

XRP/USDT $0.01/3-box Reversal Point and Figure Chart

There is no invalidation setup for the theoretical long trade setup. By their very nature, Spike Patterns have no known low or high until a reversal occurs. Diligent traders should anticipate resistance or momentum slowing when XRP price retraces roughly 50% of the O-column.

 

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Three reasons why Aptos price rally could lose steam after 400% gains

Three reasons why Aptos price rally could lose steam after 400% gains

Aptos witnessed a massive spike in its price since December 29, but on-chain analysts and experts suspect the token’s price rally could soon come to an end

More Cryptocurrencies News

Three reasons why Bitcoin price analysis hints at a pullback to this level

Three reasons why Bitcoin price analysis hints at a pullback to this level

Bitcoin price has been on a steady uptrend since January 1 and has shown no signs of stopping so far. However, things are starting to change with January 29’s daily candlestick close and could point to an incoming sell-off.

More Bitcoin News

Solana price might be in a micro uptrend, but here's why traders should practice caution

Solana price might be in a micro uptrend, but here's why traders should practice caution

Solana price is maintaining its presence above the $22 mark that it reclaimed about a week ago, enabling the altcoin to preserve its uptrend.

More Solana News

Cardano Price Prediction: ADA still in an uptrend until this level fails

Cardano Price Prediction: ADA still in an uptrend until this level fails

Cardano price accomplished an impressive 66% rally in January. As the price continues to ascend, there are reasons to consider that a pullback is on the horizon. 

More Cardano News

Bitcoin: If bulls are back, this is where you can accumulate BTC next

Bitcoin: If bulls are back, this is where you can accumulate BTC next

Bitcoin price shows a lack of momentum after an explosive move in the last three weeks. The fourth week has been relatively silent, without a lot of volatile moves. While BTC consolidates, other altcoins are rallying left and right, providing massive gains.

Read full analysis

BTC

ETH

XRP