Published
5 years ago on
February 21, 2019
Ripple (XRP) is about to do something that the rest of the market might take a while to do. That something is the formation of a devastating death cross that could see it decline to new lows in 2019. All hopes of a bullish reversal were shattered when Ripple (XRP) formed a gravestone doji a few days back which led to a sharp decline below the 50 day moving average as shown by the daily chart for XRP/BTC. Ripple (XRP) is at a higher risk of forming a death cross compared to most cryptocurrencies as the 200 day and 50 day moving averages have drawn too close. The price has already broken below a critical trend line support and is now likely to retrace to the 200 day moving average.
If Ripple (XRP) falls below the 200 day moving average against Bitcoin (BTC) which seems very likely, then we might see a continuation of the bear trend which could last the next few months. As we have mentioned in some of our previous analyses, we do not think the bottom is in despite what the mainstream media might have you believe. Just when things are about to take a turn for the worse, a wave of new bullish statements and announcements begins to surface and everybody is talking about what a wonderful invention cryptocurrencies are. Lest we forget, the exact same thing has happened many a time before. We have seen fund managers and tech figures come out in support of cryptocurrencies and the price tanked soon afterwards.
The possibility of the death cross on the daily chart for XRP/BTC is very hard to ignore. If Ripple (XRP) slides below the 200 day moving average, it will be very difficult for it to get back up and the price will see its final drop that would take us towards the bottom. Even if we were to do an Elliot wave analysis of the above chart, it would be clear to see that we are about to enter wave five but we have not entered it yet. That is supposed to be the final wave of correction which would see the price fall to its true bottom. The daily chart for XRP/USD on the other hand points to a very favorable development that could see Ripple (XRP) form a golden cross.
It would appear that the XRP/BTC and XRP/USD charts are giving us the opposite signals as what to expect for Ripple (XRP) in the near future. However, given that Bitcoin (BTC) has topped out short term and it is likely to go down in the days and week ahead, we are inclined to believe that the scenario outlined by XRP/BTC might be more plausible. Even if we were to believe that the golden cross is a plausible scenario at this stage, we would still have to consider why XRP/BTC formed a gravestone doji on the daily chart and why the price broke and closed below the 50 day moving average. All of these developments point to the fact that the bear trend is not over and Ripple (XRP) has yet to bottom.
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