XRPUSDT has formed a (remarkably equaliteral) triangle flag pattern since breaking out of the parallel channel flag*. Given the previous 25% move upwards (i.e. the flagpole), text book technical analysis theory states that there is another upwards move imminent. This is a good opportunity for a medium term (approx. one month long) bullish swing trade.A few things to note:
- *The breakout move from the parallel flag channel was a text book move upwards where it moved outside of the channel (breakout move), then returned back to the resistance line of the parallel channel, which became support, and then continued the move upwards. This provided a very good entry opportunity upon the return move once the daily candlestick showed proved that resistance line is a now a line of support (i.e. the candlestick is of a dragonfly shape) - you enter on the dragonfly share confirmation
- The triangle flag pattern is running out of room. i.e. the move is expected to come soon (this coming week) as the candlesticks are getting smaller and smaller in size, following, broadly speaking, the triangles lines of support and resistance, and there are not many days left until the candlesticks will naturally move out of the triangle.
- The market psychology behind this is that the buyers who made a profit on the recent flagpole are now selling, with newer, bullish buyers entering the market. The price which the sellers are willing to sell and and buyers willing to purchase at is getting closer and closer, which usually means the continuation of the trend as there are more buyers (in this case) than sellers (i.e. people are willing to buy at a price closer and closer to the sellers ask price and sellers don't have to drop their prices as much to entire people to buy)
- This is consistent with the optimistic and bullish sentiment for the economy in generally, stock market and crypto since Trump's election victory with Trump having recently announced that he would prefer lower interest rates i.e. The chart formation is showing that there are still more bulls than bears.
Risk to this move are that the RSI is overbought (which in this case can be ignored as it has been overbought for a few months and the nature of the indicator is that in a bullish market it remains at an overbought level regularly) and that the crypto market is prone to large gyrations on rumours and even minor US governmental policy announcements.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.