Crypto Price Analysis: Ripple in a Long Wyckoffian Accumulation

Ripple (XRP/BTC) has been a disappointment ever since it topped out at 0.00010722 on December 24, 2018. From that point, the market has been on a freefall with minor bounces in between. “The Standard”, as people call it on social media, is bleeding out while its peers such as Litecoin (LTC/BTC) and Cardano (ADA/BTC) are pumping like crazy. Are we seeing the beginning of the end of Ripple?

Perhaps not.

People are sometimes too focused on short-term price action that they fail to see the bigger picture. We took a long and hard look at Ripple and saw that the market may be stuck in a lengthy and arduous base building mode. In this article, we present the case that Ripple is in a long Wyckoffian accumulation.

Smart Money in Heavy Accumulation

We’ve been watching Ripple for a long time now. From a technical perspective, it doesn’t make sense how the number three cryptocurrency in terms of market capitalization is lagging behind other large cap altcoins. The underperformance is so bad that a bearish case can be more palpable at this point.

However, the smart money or the “man” jockeying the market doesn’t care about how other coins are doing. His only concern is to accumulate as much as Ripple as possible at the lowest possible price. We believe this to be the case because Ripple’s price action in the last twelve months shows striking resemblances between a Wyckoffian Accumulation model.

Wyckoff Schematic #2

Source: StockCharts

In this schematic, notice how the secondary test (ST) in Phase B is significantly lower than the ST in Phase A. Also, observe how the last point of support (LPS) in Phase C is above the ST in phase B but it is trading between the selling climax (SC) and secondary test (ST) in Phase A. Read that again if you have to because these are the similarities that we’re seeing in Ripple.

 

XRP/BTC daily chart

Crypto-enthusiasts with no exposure in other markets may find it difficult to believe that an asset may accumulate for more than twelve months. In more mature markets like the stock market, a stock may range trade in accumulation for years before launching a bull run. What we’re seeing in Ripple is the market structure of a potential bagger pick as they call it in the stock market.

To confirm this bias, we need Ripple to stay above the LPS, which is between 0.00006 and 0.000062. Fortunately, classical technical analysis supports our view.

Converging Supports Affirm Our Position

Support between 0.00006 and 0.000062 is an important price area for XRP/BTC. In November 2017, that level acted as a tough resistance and kept the market from igniting a bull run. When bulls breached the resistance and retested it in December 2017, they launched a face-melting parabolic run that catapulted the market to as high as 0.00022968 on January 4, 2018.

Daily chart of XRP/BTC

Even if you don’t have a background in Wyckoff accumulation, it is not difficult to see how bulls will likely make a stand at current levels. The argument grows stronger when you consider the long-term diagonal support that’s keeping the market from printing a lower low on the longer timeframe.

Weekly chart of XRP/BTC

The converging supports help validate our bias that Ripple is trading within a Wyckoff accumulation model. The smart money appears to be on track to print a last point of support (LPS) between 0.00006 and 0.000062 with impeccable timing.

Bottom Line

Our view that Ripple is in a long and arduous Wyckoff accumulation remains valid as long as the market stays above support of 0.00006 and 0.000062. If our read is correct, Ripple then may be preparing for a bull run that would put the 2017 parabolic run to shame. The longer the base, the higher the space.

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.