Ripple Technical Update: January 17th, 2018
XRPUSD Daily Chart (BITSTAMP)
From a technical perspective, Ripple's rapid rise and fall over the past month has been a tale of simple candlestick patterns, trendline breakouts, and volume spikes.
XRP surged to new highs by breaking above the trendline at 0.39887, which coincided with record-breaking volume – a textbook example of what a true breakout looks like.
It then rallied up to a high of 3.317 while simultaneously registering a bearish RSI divergence (92.59 on 12/14/17 and 92.22 on 1/4/18).
Most importantly, the 1/4/18 session traded a H-L range of .80466, while the real body (Open - Close) was just 0.00497. If we divide the H-L range by the O-C range, it results in a trading range that is 161.9X the size of the distance between the open and close. After a feverish rally —
when this amount of volatility coincides with a picture-perfect tug-o-war between bulls and bears — it serves as an extremely strong indication that a large-scale price reversal is in the works.
We now see large bottom wicks for the last two sessions, with both real bodies holding above the 1.18 level of support from mid December 2017. Today's candle suggests that this support level is very strong, and we will likely see price recover some of its losses over the coming sessions.
XRPUSD 4-Hour Chart (BITSTAMP)
On the 4-hour chart, a closer look at the RSI reveals how surprisingly accurate it's been at diagnosing tops and bottoms. The last time the RSI dipped below 20 was back on 7/11/17 when Ripple was trading at just 0.15 to 0.18 cents. Four hours ago (1 bar ago) XRP was trading at .9037 with an RSI value of 19.74 – it's currently trading at 1.42 with an RSI value of 47. If XRP can break above the trendline from it's previous swing highs, it may look to retest the 2.00 level and eventually the 2.50 level.