Volatility Suggests XRPUSD D Chart is Ready for a Bullish Break

28. Feb. 2019

XRP has participated less in the bounces from the December 2018 selloff than ETH. My hunch is that you can thank the fact that it bottomed and broke out in September for a lot of divergence. It's needed a long time to re-compress.

I think it's either ready for a very large rally, or at least presenting an opportunity to catch another one of its pumps, and is presenting a good R:R ratio to enter right now on that basis.

The previous few XRPUSD pumps have wicked above and then closed at approximately the D 200 VWMA. Broadly speaking it appears that XRPUSD follows VWMA pivots more consistently than SMA pivots, so I've plotted my bands as VWMA / vol-weighted STDEV. 200-period WAVE-PM on the D is entering the sweet spot, 14-period is climbing and I would expect a cross as soon as a move starts (WAVE-PM is non-directional leading indicator for probable trending). Lower period lengths are sufficiently compressed.

4h shows shorter period distributions weighting over longer period distributions.

4h XRPETH has crossed pivots for mean reversion upwards. 4h XRPBTC appears to have flattened out. Volume is rising on both pairs, especially over February.

D 200 VWMA is ~0.39. Implied mean reversion from longest compressed period is 0.43. Implied mean reversion from longest overexpanded period is ~0.50. Note that these are moving rather than static levels and can be expected to decline a bit as we take more time to reach out to them. I wouldn't count on higher targets, but the historical pattern suggests a low nonzero probability exists. Note that the pattern is rarely to sustainably stay at the levels it reaches out to for long once it gets there - so I think you'd want to stay very clear of any FOMO and trail TP at frequent historical targets.

I see around 5:1 R:R for the lowest of these targets. If BTCUSD declines next rather than staying sideways or climbing, this could easily stop out irrespective of XRPBTC.

XRPUSD just got a Coinbase pairing. Some people might call that FA, but it's more precise to say that it provides a brand new mechanism to distribute after a pump. Most XRP volume is currently traded on XRPBTC pairs rather than fiat or stablecoin pairs - a Coinbase pairing, and what that signals to other fiat exchanges about the viability of adding XRP, is a big part of how one might imagine that changing. It would seem to be very convenient for anyone with a large amount of XRP if it started to take on a role in crypto trading closer to that of ETH - the current only other coin than BTC to be primarily traded against fiat/stablecoin pairings.

If you'd like to learn more about the indicators used to produce this chart, check out SharkCharts.live, and DadShark's Youtube channel where you can find his daily livestreams applying this methodology as well as the series of overview videos I've released for these indicators.

I am an amateur and you shouldn't take anything I say as financial advice. I'm interested in any feedback.

3. März 2019

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On low timeframes, XRP has been holding up pretty well so far compared to ETH. That said, in the past 24 hours a lot of major alts started drifting downwards on low timeframes, as has BTCUSD. This has brought XRPUSD down to a retest of the bottom of its 4h compression range and the 4h 200 SMA.

If it's time for XRP to breakout imminently, this is a pivot it should absolutely be bouncing. A CCI roll up on the 4h at this level makes a lot of sense to me for a place to enter on that basis. Doesn't seem like there's much to gain from a short on a breakdown from a R:R standpoint but it might make sense for a scalper.

4. März 2019

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4h chart has almost thrown in the towel on supporting a bounce. D chart has benchmark support from VWMA for both XRPUSD ~0.295 and XRPBTC ~0.00007941 coming up within 2%.

If we start printing more than quick wicks below those levels, the window is probably closed for an immediate move.

4. März 2019

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A day later and the picture, I think, has becoming more clear.

BTCUSD is nearly done with its mean reversion. Good chance that this is a pivot that gets a strong reaction up or down, and given that major alts are near D VWMA pivots on their BTC pairings now, I'm leaning towards that being the local low.

Another pattern though has become pretty clear to me from watching the micro TF charts and orderbooks on XRP - bears are totally exhausted and it doesn't look like anyone is selling XRP for the sake of selling XRP anymore. Why do I say this? XRPUSDT on Binance has been repeatedly poking lower than 0.30 while XRPUSD on Kraken, which is a pair with 5x leverage available no less, repeatedly holds 0.30 for extended periods of time. This is a pair that should be extremely easy to arbitrage and nobody seems to be trying very hard to do so nor is anyone large looking at these breakdown attempts as a time to get short on XRPUSD.

Somewhere around 0.0295 is where we'd have to seriously question whether XRPUSD is reactivating a longer term downtrend based on the tight D VWMA range. Until then, I'm looking at what I've seen over the past day as extremely bullish - there's just nobody large left selling XRPUSD.

It remains the case that a BTCUSD breakdown would drag my bullish scenario on XRPUSD with it - and we're testing that right now as we approach mean reversion.

5. März 2019

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This is a very poor showing by XRP relative to ETH on the 4h VWMA chart.

All is not lost for XRPUSD or anything like that, but unless this can bounce while the fiat pairs are actually climbing instead of falling, there's no reason to buy XRPUSD instead of ETHUSD.

A CCI roll up and rally here in the midst of another BTCUSD leg up and we're in business on XRP. Otherwise, we just watched XRP flub its opportunity to break out over the past week - it's just not quite ready and there would be more capital efficient ways to trade the same trends until it is.

5. März 2019

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Another angle showing the same basic picture - the clear opportunity for XRP to breakout relative to BTC and ETH is still on the table, but the recent trend has been against.

I wanted to keep this idea clear that this isn't doomed yet - but that it now needs to show us a specific move next.

6. März 2019

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Unless this chart dramatically changes, I'm going to leave this idea aside for now. We're not getting the specific move I was looking for as of now.

There's nothing massively wrong with the scenario per se, but XRP just isn't performing better as either a long or short than ETH right now, which is more liquid.

That will change if it catches a pump, and XRP should definitely be in your watchlist at this point. However, given some great opportunities to make moves, XRP has stubbornly been compressing further, which tells me it's still too early and there are better places to put capital in crypto right now in the short term and time to wait for an even better setup on XRP. So, I'm putting it aside at roughly breakeven for now, having basically gone sideways on net for a week.

6. März 2019

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XRP has shown some durability over the past few hours that ETH hasn't.

Maybe today if it finally breaks up hard on another leg of pushing, more likely on some leg in the coming weeks. Either way, watchlist and alerts. Equities look very toppy this week, after all, and broader market volatility could be what does it.

8. März 2019

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A test of the XRPBTC D 200 VWMA is imminent - it is less than 1 percent away and we'll reach it just going sideways within 2 days.

9. März 2019

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Tested the D 200 VWMA



Last few pumps like this have ended in disappointment. ETH has gotten very disappointing in the past 48 hours or so. So, this might be the spot.

I did myself accumulate a bag given the D 200 VWMA test, so here's hoping.

9. März 2019

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This looks right.

13. März 2019

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Hello.

13. März 2019

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This took a couple weeks and several fakeouts. XRPBTC held the D 200 SMA for most of a week. Finally, we get a pump that looks to be the real thing.

18. März 2019

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Another week, another fakeout.



XRPBTC is failing to hold the D 200 SMA. The W 50 VWMA is close by, but as far as benchmark support goes, we're just not seeing strong respect.

That's a problem. The front page of TV is littered with bullish posts about XRP and it's not actually doing anything other than selling off slowly into BTC. The XRPUSD chart looks pretty good as a tight narrowing of volatility and a series of higher lows, but it's not actually doing much but imitating the direction of BTC in a tighter distribution.

XRPETH VWMA D shows clear repeated rejections at the D 200. As of now, it looks like ETH is going to continue to be the better place to make bullish trades.

Given that the D benchmarks don't seem to be mattering much to large players in the market, there is a growing risk that we'll test down to W benchmarks.

Something about this picture needs to change for XRP to be an efficient use of capital to try to trade bullish.

19. März 2019

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Could be noise, but I haven't seen this behavior on XRP micro TFs in weeks, at least - on the BTCUSD rally, XRPETH was sideways whereas it's been dumping previously. Now, XRPUSD is holding and showing some strength.

I'd like this to mean something since I've gone out of my way to track this. Kinda need to see something develop on larger timeframes first. I'm posting about it though because it's so discordant with previous behavior.