A massive bearish Head & Shoulders pattern?
Updated
First off, I hope this pattern is invalidated. It is scary as #$@% for any HODL'er, especially those first buying in mid 2017 forward.
I have been watching this pattern on the charts as a possible option since the massive spike up to near .76 in September. The selloff over the last week brings it up front and center.
Bottom line: if we break through the neckline (currently near .285) and continue down, the pattern is validated and the target is near .02.
I told you it would be scary as #$%.
A few things:
1. The pattern isn't valid until there is a break of the trendline and follow through.
2. To arrive at the target near .02 I had to use a non-traditional method of calculating it... I used % drop instead of $. Reason? The $ target would put the price target below zero!
3. A break of the neckline doesn't guarantee it will hit the target, it is just a rough guideline (and rougher than normal because of #2).
4. Doing a H&S on a log chart doesn't make me feel warm and fuzzy, but given the limited pricing data in crypto and the extreme price movements, it is the best option.
5. I added a pitchfork and trendline to the chart to help confirm the neckline.
I have been investing/following XRP for many years. Most of that time (prior to early 2017) it was hovering near .006. Every so often it would rally up a few cents, and then back down to .06. XRP as a tech did just fine at those levels, Ripple (the company) was able made progress at those levels driving adoption of a better set of rails for world banking. Still, hope the H&S pattern doesn't validate and that I am completely wrong on this one, and that price skyrockets above the right shoulder. This would be devastating to many in the community.
Remember, don't trade or invest on anyones analysis but your own. Do your own research. Manage your risk... it's way more important than being right.
I have been watching this pattern on the charts as a possible option since the massive spike up to near .76 in September. The selloff over the last week brings it up front and center.
Bottom line: if we break through the neckline (currently near .285) and continue down, the pattern is validated and the target is near .02.
I told you it would be scary as #$%.
A few things:
1. The pattern isn't valid until there is a break of the trendline and follow through.
2. To arrive at the target near .02 I had to use a non-traditional method of calculating it... I used % drop instead of $. Reason? The $ target would put the price target below zero!
3. A break of the neckline doesn't guarantee it will hit the target, it is just a rough guideline (and rougher than normal because of #2).
4. Doing a H&S on a log chart doesn't make me feel warm and fuzzy, but given the limited pricing data in crypto and the extreme price movements, it is the best option.
5. I added a pitchfork and trendline to the chart to help confirm the neckline.
I have been investing/following XRP for many years. Most of that time (prior to early 2017) it was hovering near .006. Every so often it would rally up a few cents, and then back down to .06. XRP as a tech did just fine at those levels, Ripple (the company) was able made progress at those levels driving adoption of a better set of rails for world banking. Still, hope the H&S pattern doesn't validate and that I am completely wrong on this one, and that price skyrockets above the right shoulder. This would be devastating to many in the community.
Remember, don't trade or invest on anyones analysis but your own. Do your own research. Manage your risk... it's way more important than being right.
Note
Price is currently near .30 and falling. Getting dangerously close to the neckline which is currently running near .29. Watching for possible reaction near that level.Note
We got a reaction right at .29 as expected. Bulls bought it up a little in the past 24 hours. Nothing memorable on volume for the buying though, and bears selling it back down to near .29. Holding the line near .29 is very important to the mid term prospects of XRPUSD. So far the bears are still in control so risk is high for them to attempt to break that level and reap profits being short.
The best potential for the bulls I see requires one to flip over to the BTCUSD chart. There is a large daily divergence between RSI and price. As price hit a new low in the past few days, RSI did not. This indicates weakening momentum from the bears. Does this mean a reversal must happen here? No, but weakness like this typically is accompanied with a trend change. It's all up to the bulls now.
From a sentiment perspective, using Crypto Twitter as a gauge, it is hard to find a single analyst or person on crypto with any sort of reputation who is not projecting BTCUSD to fall to between 1000 - 3000 before any kind of correction. The crowd has finally moved over to embrace the bear, everyday casual investors seem to have disappeared, the long term HODL'ers are scared, and short interest is at an all time high... the easy trade is shorting the market now. Prime opportunity for reversal to take hold... maybe after a death defying drop and reversal? Time will tell.
Good luck out there to the few of you still around in this market. I continue to believe that the fundamental prospects for crypto and blockchain are as strong as they were in 2014 when I first became interested in RippleLabs and XRP. As is true of everything in tech... the hype portends that the revolution is right around the corner, but the reality of building the foundation takes much more time than most who have not actually built technology realize. This is the gap that we are in right now... where initial expectations were incredibly high, and reality of the amount of time and effort to change the course of the worlds financial engine... even with a breakthrough like blockchain and digital assets.
Note
Price is breaking under neckline. If we don’t get back above with conviction, the H&S is confirmed.Note
Big reversal! I would say that the last 24 hours has met the criteria of "getting back above the neckline with conviction". The H&S isn't technically invalidated until price crosses above the right shoulder (.76XX), so It's possible that the neckline could still break down at some point, but for now it is not as urgent a possibility.
Will be watching for a move above .76XX to put a fork in the scenario for good.
Note
After a big reversal day where XRP rallied up to resistance at .39XX and has backed off while other top crypto assets continued to make new highs. It is staying well within the shadow of the right shoulder so far. The follow-through has been tepid. It needs to start moving up above .39XX or else I start considering this a counter trend dead cat bounce, and plan for a retest of the neckline.Note
Price cut right through the neckline with very little resistance over the last few hours. The massive H&S that I have been warning you about is front and center. We could see a relief rally soon, vut unless a massive reversal on high volume, it is a likely a dead cat bounce.
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