XRP/BTC : What are the important areas? - Airdrop approaching
Just wanted to give a quick update on XRP/ BTC - the airdrop approaches on the 12/12/20 and every holder of XRP will recieve 1 SPARK token for every 1 XRP token they hold.
It sounds great on paper - but many new investors see this as a easy way to make "free money", the risk being after the airdrop occurs the main token can plunge leaving the investor with a largely devalued asset & if the free token from the airdrop does not hold value you put yourself in a bad position.
One strategy you can use to prevent this is using a trailing stop loss, or manually raising your stop loss as price increases. You may get knocked out and lose your chance at a airdrop - but more important is not losing your initial investment or having a extremely large dint in your portfolio from bag holding a failed airdrop hype.
Right now XRP is showing some Bullish signs - for example the Bull Pennant pattern (where price makes a straight run upwards then converges inbetween a small wedge with 4 touches, a potential sign of continuation upwards) but signs are just that until proven true. We are still under some important resistance areas, and i give a warning that if XRP BTC loses the key support area of 2900-3000 a significant decrease in value is possible.
The Bull Pennant pattern is not the only mixed signal here- it has a high success rate - but all patterns can fail. We have been making consecutive LH's Lower Highs which are a sign of a downtrend continuation, but we are also making a LH (Lower High) which is a sign of a uptrend continuation so XRP is coming to a pretty crucial area and we should see confirmation of direction soon.
The fibonacci tool is usually drawn from one key swing point to another - and gives us potential key levels to watch. It is quite common for the price to come up to the 0.618 fibonacci and decrease in value, rejecting from there. Right now XRP has currently come down from that area, aswell as a Supply Cluster (if you dont know what a Supply Cluster is; click on the below linked idea for a in depth guide on how to use them in your Technical Analysis ), basically a Supply Cluster is a small rectangular formation where a large decrease in price occurs from - when price revisits this area it is common for it to decrease in value once again.
These factors lead me to believe that short term the 0.618 & Supply Cluster is the most important point of reference followed by the support under us. So while we are under the 0.618 resistance area i would be wary on XRP. If it does start to increase in value as a trader i would definately consider a plan to take profits and be out of the trade before the Airdrop ends if thats what your aiming for - or know where your going to cut your losses if thats the case, as mentioned under 2900-3000 satoshis can see a large retrace with a potential of moving down towards 2400-2500 satoshis.
If you were wondering what the zones you can see on the charts are - they are explained in the bottom linked idea :)
Thank you traders, if you found this post informative show your appreciation by giving us a like or comment!
It sounds great on paper - but many new investors see this as a easy way to make "free money", the risk being after the airdrop occurs the main token can plunge leaving the investor with a largely devalued asset & if the free token from the airdrop does not hold value you put yourself in a bad position.
One strategy you can use to prevent this is using a trailing stop loss, or manually raising your stop loss as price increases. You may get knocked out and lose your chance at a airdrop - but more important is not losing your initial investment or having a extremely large dint in your portfolio from bag holding a failed airdrop hype.
Right now XRP is showing some Bullish signs - for example the Bull Pennant pattern (where price makes a straight run upwards then converges inbetween a small wedge with 4 touches, a potential sign of continuation upwards) but signs are just that until proven true. We are still under some important resistance areas, and i give a warning that if XRP BTC loses the key support area of 2900-3000 a significant decrease in value is possible.
The Bull Pennant pattern is not the only mixed signal here- it has a high success rate - but all patterns can fail. We have been making consecutive LH's Lower Highs which are a sign of a downtrend continuation, but we are also making a LH (Lower High) which is a sign of a uptrend continuation so XRP is coming to a pretty crucial area and we should see confirmation of direction soon.
The fibonacci tool is usually drawn from one key swing point to another - and gives us potential key levels to watch. It is quite common for the price to come up to the 0.618 fibonacci and decrease in value, rejecting from there. Right now XRP has currently come down from that area, aswell as a Supply Cluster (if you dont know what a Supply Cluster is; click on the below linked idea for a in depth guide on how to use them in your Technical Analysis ), basically a Supply Cluster is a small rectangular formation where a large decrease in price occurs from - when price revisits this area it is common for it to decrease in value once again.
These factors lead me to believe that short term the 0.618 & Supply Cluster is the most important point of reference followed by the support under us. So while we are under the 0.618 resistance area i would be wary on XRP. If it does start to increase in value as a trader i would definately consider a plan to take profits and be out of the trade before the Airdrop ends if thats what your aiming for - or know where your going to cut your losses if thats the case, as mentioned under 2900-3000 satoshis can see a large retrace with a potential of moving down towards 2400-2500 satoshis.
If you were wondering what the zones you can see on the charts are - they are explained in the bottom linked idea :)
Thank you traders, if you found this post informative show your appreciation by giving us a like or comment!
Comment:
As you can see from the chart, sharp rejection from the defined area mentioned on XRP.
Comment:
It is very common for the price to have strong downmoves from the 0.618 fibonacci level
Comment:
Great education from this idea.. as you can see the 0.618 rejection and then loss of support was basically the nail in the coffin for XRP and the start of the strong downmove.
