Here I have conducted a study into XRP using the BTC Halving dates as a common temporal reference point. I posit a fractal recurrence of the 2017 run up to the XRP all time high from the latest BTC Halving.
Complicating the matter are two anomalies:
December 12 - The Flare Network announced a hard fork of the XRP blockchain with the promise of an airdrop of SPARK tokens for those holding XRP on December 12. This caused an anomalous price surge in XRP as people piled in to XRP to be award SPARK tokens, before commencing to sell-out of XRP.
December 22 - The SEC (Securities and Exchange Commission) of the USA announced a lawsuit against Ripple and two founders for selling digital securities, represented by the XRP token. This announcement initiated the waterfall of selling that drove XRP down by over 69%, from $0.57 to $0.16, as US crypto Exchanges further added fuel to the liquidation uncertainty by announcing that they would halt XRP trading pending the outcome of the SEC's case.
However, what is noticeable in the chart around this time is that both the SPARK spike and the SEC crash effectively cancel each other out, and by the conclusion of the 32nd week after the BTC halving, in the week commencing December 28, XRP has hit a bottom and its fortunes had decidedly turned up. This reflects a similar change in sentiment within the same period in 2017 following the previous BTC halving. Giving further credibility to the theory of a fractal recurrence is that 5 weeks following this 32 week pivot low, in both time periods, XRP had reached another peak, that was followed by 3 weeks of correction.
That now brings us to this week, 41 weeks after the latest BTC Halving. If we cast back to 2017 we see that this was the start of a second leg up for XRP, reaching a pivot high in 4 works. We should, therefore, expect to see another substantial peak reached within 4 weeks, followed by a correction and possibly by a period of consolidation and a final surge to a new all time high, 77 weeks following the BTC Halving.
In 2017, the second leg up reached a high point just shy of 2.5 times the depth of the preceding correction. Using this same projection for the current period, we see that if a fractal recurrence of this was to play out, then we should expect the next high at just shy of $2.69, before the subsequent correction down to around $1.10, a 59% drop.
Now, whether it plays out exactly like this is up to the gods and the "animal spirits" of fear and greed. What can be seen, however, is that there is significantly lower volume today than there was in 2017, and the most recent price spike was relatively muted compared to 2017. This seems to be a result of the SEC case, which would imply that there might be some volatile moves on either good news or bad. One might suggest an example scenario for each:
Good News - A settlement is reached - the announcement of a settlement in the case and US exchanges announce the recommencement of XRP trading. This could see a significant surge in price, possibly a violent rally on the rush to buy the good news.
Bad News - A protracted trial ensues - the interest in XRP might significantly decline as the speculation on a positive outcome is wound back and holders of XRP seek higher performing assets for the duration of the bull market, leading to further sell offs.
Either event might significantly disrupt the price performance of XRP and break the fractal pattern of 2017, but we will know for sure in 5 weeks.
Comment
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Has the SEC legal case just induced a 2 week lag into XRP price discovery? Is my estimate of $2.69 for the next price peak too low or too high?
Bro that’s bot following the SAME PATTERN as 2017 .. when u follow the SAME PATTERN as 2017 it will go straight to 20-28 .. and then a few months after like 150 -200
Crypto-Swing
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@REALMONEY90, Yes, I thought so as well when I simply multiplied by the percentage gains of 2017. I would love to be proved wrong, but, I believe your hopes are very unlikely now. Given the intention to suppress the price by the SEC, the relatively low volume and the muted first spike, its very hard to see conditions existing for a 1700+% gain in the next 4 weeks.
Instead, I feel it is much more realistic to assume that the future price action will be relative to the current conditions and recent prices.
"The past does not repeat itself, but it rhymes."
- Mark Twain
craterjacob
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@Crypto-Swing, did you consider the last two bull runs/ halvings? It seems to me that the timeline of these occurrences are pushed back roughly a month every halving/ bull run. This would give xrp almost 8 weeks to accomplish that 1700% gain instead of 4 weeks. Your thoughts?
Crypto-Swing
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@craterjacob, No, I only considered the relative performance of XRP in the last BTC halving cycle to the current one. I have noted that on a timing basis they are identical so far. Price trend wise, they are also relatively the same, if one cancels out the Spark hype pump and the SEC hype dump.
The only real observable difference then is the suppressed first peak (Feb 01, 2021) relative to the corresponding peak of the previous cycle (Mar 27, 2017). This gives a good indication that just casting the percentage gains from the previous cycle as a basis for expected gains in this cycle is wrong and overly hopeful, in my opinion.
But you know what they say about opinions, so I'm just looking objectively at what the chart is saying based on the relative performance of this first peak.
craterjacob
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@Crypto-Swing, hmm okay, I guess that makes sense, I don’t really know much about technical analysts lol just try to notice patterns and such. Thank you for your insight though. Some people believe that the duration of the cycle will increase as cryptocurrencies are adopted, could this be anything for a person to consider when estimating growth of a coin?
Crypto-Swing
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@craterjacob, No. This is mixing cause and effect in my opinion.
The cycle only exists because of the BTC Halving process and because of the influence BTC has over all crypto markets. BTC currently makes up 61.7% of all crypto investment. If BTC didn't dominate crypto investment so much, its Halving cycle would have a much smaller influence. So over time, as other projects reach maturity and start delivering on their real-world outcomes, you will see the influence of this cycle diminish and perhaps even disappear from some coins. So, with respect to your question, the duration of the BTC cycle will not change so much as its influence will reduce for some projects. Hopefully that distinction makes sense.
You can monitor Bitcoin Dominance actually by adding the BTC.D ticker to your watch list in TradingView. Another good ticker is TOTAL giving you a view of the total crypto market - currently 1.5T.
In terms of the potential for growth in a particular token, there is really too much to discuss here. But you do need to understand the role of Bitcoin and its halving process in the timing of the Bull and Bear market cycles, so at least you know when values are going down. To help you, I will share this chart with you.
Be very careful to note the following:
- The 4 halving events and the cyclical nature of the price action around these events;
- What happens in the periods indicated of Contraction, Recovery and Expansion; and
- Where we are in the current cycle.
If you want to understand how to predict price action trends, then you might want to follow this guy - tradingview.com/u/TradingShot/
If you want to look at some good analysis of the BTC cycle, then check out this guy -
In fact, both might just save your life savings if you understand their explanations.