XRP 100% upward potential, BUT FIRST to finish leg C down
Updated
--> We clearly see the movement of the five subwaves in the upward impulse wave, followed by the ABC correction, as prescribed by Elliot Wave Theory.
--> The C leg has been drawn for the first part, but can be expected to go lower (according to the wave theory principles), before a new uptrend can start, which is also confirmed by MACD and RSI indicators (see further).
*Applying the Elliot Wave Theory rules:
EW Theory can be easily explained and applied looking at this graph. We can see the three rules hold true:
--> Rule ("I") Elliot Wave Theory rule 1: Wave 2 cannot exceed wave 1 in retracement (wave two can not correct to a lower price than wave 1’s starting point) —> OK
--> Rule ("II") EW Theory rule 2: Wave 3 can never be the shortest: a tricky one but subwave 3 is still longer than subwave 1 —> OK
--> Rule ("III") EW theory rule 3: wave 4 can never overlap wave 1 —> OK
*Some guidelines are also highlighted and confirmed:
--> (i) Guideline: if wave 2 is steep, then wave 4 is relatively flat: Wave 2 shows a retracement from 0,000052 to 0,00003564 or 46% correction, which is quite steep so 4 will be relatively flat and is actually around 20% —> OK
--> (ii) Guideline: After a "5-wave" impulse advance, corrections ( abc ) usually end in the area of prior Wave 4 low —> we use this as a FIRST ESTIMATE to where the price will retrace BEFORE taking of for the next 5-legged impulse wave upward!
*Additional information on the graph confirms our viewpoint:
--> The MACD is still in decline with the red line over the blue + will reach a bullish cross somewhere around end of leg C.
--> RSI is also in a downward trend for the moment.
*Conclusion:
--> It is best to sit back some more while leg C is developing, and jump back into XRP when indicators such as MACD and the start of a new first wave leg confirm a bullish reversal (note: price potential at this time to All time high is around 100%, but will be even more from the C leg bottom).
PS: this article is by no means intended as formal investment advice, please do your own due diligence and best of luck!
Note
Update: our leg C was drawn a little bit too steep initially, but we can clearly see it continuing. Moreover, don't forget that it is an overall guideline that the correction leg should end near the top of wave 4. You can also see that we are likely in the 5th subwave within leg C.
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