Trade Recommendation: Ripple/Ethereum
The Ripple/Ethereum (XRP/ETH) pair took out resistance of 0.0015 on September 18, 2018. This triggered the breakout from a large double bottom structure on the daily chart. The price movement attracted breakout traders and trend followers. This enabled the pair to climb to as high as 0.0034179 on September 21.
While we did miss the breakout, there was no reason to chase the breakout rally. After all, breakout rallies always fade. This is something that we’ve seen over the last few weeks in the crypto market. The key is to wait for the market to consolidate and show us a continuation pattern. We’re seeing that now in Ripple/Ethereum.
Technical analysis shows that XRP/ETH is creating a bullish flag on the daily chart. Looking at this pattern, we can see that the pair is consolidating between 0.0020 – 0.0025. With the range established, we can start accumulating positions at the support.
In addition, the consolidation has allowed technical indicators to cool off. XRP/ETH is now out of extreme overbought territory on the daily chart. Also, volume has significantly declined. This is a characteristic of a bullish pullback. The decline in volume can be attributed to sellers losing ammunition over time.
The strategy is to buy as close to 0.0020 as possible. As long as the market is above this level, it has the momentum to climb to our target of 0.0035.
The process may take more than a month.
Daily Chart of Ripple/Ethereum on Binance
As of this writing, the Ripple/Ethereum pair is trading at 0.00213541 on Binance.
Summary of Strategy
Buy: As close to 0.0020 as possible.
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.
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