XRP Consolidation Continues, Bulls Wait for Breakout at $0.80
- XRP price congestion continues, extending its duration to ten days.
- Trade opportunities for bulls and bears are now present.
- Downward pressure remains strong.
XRP price continues to consolidate in a relatively tight trading range between $0.58 and $0.62. However, the time spent in this sideways movement creates confusing and difficult trading conditions, especially on a time-based chart like Japanese candlesticks.
XRP price action develops trade setups for the long and short sides of the market
The price of XRP may see some explosive moves soon – the question is where the breakout will occur and in which direction. From the perspective of a Japanese candlestick chart, this can be a difficult task, even within the Ichimoku Kinko Hyo system. However, Point and Figure mapping eliminates much of the “noise” and provides a clearer view of the future.
On the long side of the market, the hypothetical setup is a buy stop order at $0.65, a stop loss at $0.61 and a profit target at $0.80. Entry is based on the break above a triple top pattern which would develop at $0.64. This could also be interpreted as a quadruple split upper breakout.
The long entry represents a reward/risk ratio of 3.75:1 with an implied profit target of nearly 24% from entry. Since trades rarely reach their full profit target potential, a trailing stop of two to three boxes would help protect any implied profit. The trade is voided if the current O column changes to $0.57.
The theoretical short setup is a sell stop order at $0.58, a stop loss at $0.62 and a profit target at $0.46. The entry is based on a triple bottom breakout which simultaneously confirms a breakout under a bearish flag.
Although the identified profit target is $0.46, any decline from the current value would likely be met with firm support and buying pressure at the psychological and technical $0.50 price level. A two-box trailing stop would help protect any profit made after entry. The short XRP price setup has the least profit potential compared to the long setup.
The short setup is invalidated if a new X column forms and rises to $0.67.