XRP Short Idea

We’ve already reviewed Bitcoin and Ethereum at this point. So, it only makes sense that we move on to the next coin, which is $XRP.

Right off the bat, things look pretty bearish for $XRP. This is especially true when we look at its recent price action.

The most recent (and steeper) downtrend resistance that has formed has already been tested pretty solidly over the last few weeks and it appears that the price is nudging right against that downtrend resistance right now.

Let’s see if the RSI or any other momentum indicators give us reason to believe that the price will break through this steep, recent downtrend resistance at any point in the near future.

Relative Strength Index(14) for $XRP

We can see how the RSI(14) shot up as the price of $XRP rose along with the rest of the markets in mid/late-December.

However, ever since, the RSI(14)’s trajectory has looked boring and bearish. There was a decline from a value of 62 to 51 on the RSI(14) on the daily, which isn’t huge, but it does show falling sentiment.

We’ll take that for what it is. It isn’t a major signal, but its something that’s worth consideration in the larger picture.

Balance of Power RSI

Its been a little while since we’ve looked at this one, but its definitely one that’s important for us to review.

In the picture above, we can see a major decline in the Balance of Power RSI rating for $XRP. That means that $XRP has been getting sold off in large numbers over the last few days.

That does not bode well for future price action because the rate of selling that’s been indicated by the Balance of Power RSI is greater than what we see reflected in the price. That means that there could be a decent amount of buyers that are still in the markets that are blissfully unaware of the fact that they are being dumped into.

Zerononcense Reversion Ribbon V2

While the picture above may look positive, it is not. We’ve seen the ribbon drawdown from one hell of a height to where it is currently.

The values are almost negative, which would confirm negative price momentum (which is ever increasing) on the daily resolution.

Of course, I’m looking at this over a long span of time, dating back to September to present day (approximately 4 months).

Ichimoku Cloud

The Ichimoku Cloud for Ripple/XRP is not looking good and it ain’t giving us a good forecast either.

Check it out below:

Bottom of that cloud = resistance. The price is nudging right against it. Again, this is yet another measured resistance that $XRP must break through. Based on the current price action and the way that the markets are looking right now, this seems doubtful.

Quick Look at Exponential Moving Averages for $XRP

Below, we’re going to take a quick look at the exponential moving averages (EMA) for $XRP on the daily resolution:

In the chart above, we have the EMA-12, EMA-26, EMA-50, EMA-100, and EMA-200.

The most important ones, however, that we’re going to pay attention to here are the EMA-50 and the EMA-100.

For reference:

EMA-50 = golden line

EMA-100 = dark blue line

Here are the values for both EMAs:

EMA-50 = .3677 cents

EMA-100 = .3914 cents

Here’s the issue:

These EMAs are major resistance/support points. In this situation, they are major resistance points because they are over top of the price. Therefore, this is yet another impediment to bullish price action for $XRP.

Conclusion

Given all of the resistances that $XRP must break through + its weak price action and our overall theory that the markets are due to drawdown a bit more from its last run, my idea is to place a short position here.

Now I need to formulate a trading strategy.

First I’ll look at some points of support. I’ll have to use the visual price action (as represented by candles), in order to come up with some solid supports.

Below, are the ones that were marked:

Given this fact, here is my official R/R for the trade:

This is a pretty conservative R/R in my opinion. If the S/L is hit on this idea, then the trade is definitely busted at that point. However, if it hits the target area, that would probably just be stop #1.

Trade closed: target reached:

Trade target reached.

Thanks again for following guys! More ideas to come.