|XRPUSD| XRP REACHED OVEREXTENDED STATE | BEARISH MOVE PENDING |
Good evening beautiful people. XRP has been killing it these past few days due to the info regarding the summary judgment in the Ripple vs SEC case. This news has conveniently placed the price against the current resistance of the bear flag we are currently riding. This level of resistance has proven to be strong therefore, I think the price action is going to slow down and most probably we should be seeing a bit of a cool-off. In the following paragraphs, I shall describe why I feel this narrative could come to fruition:
RSI: On the daily chart the RSI is nearing overbought territory which puts the market in an unhealthy position as it will overextend if the price continues to the upside. Many traders use this metric; therefore, from a psychological standpoint, this indicator should express bearish signals to those who follow it.
Bear flag: This formation has held strong for quite some time having the support and resistance levels tested on multiple occasions however all trends have to come to an end and I am under the impression it should be happening sooner than later due to the bigger trend resistance, as seen in white, approaching steadily. The clash with the long-term bearish trend should result in a strong reversal following the overexertion of the current market.
The price should consolidate within this small area for a bit which will result in the RSI increasing its overbought stance before the price gradually decreases back down to the 100EMA, which it has drifted away from in the most recent run.
My stance on this particular market is going to be bearish due to all the indicators aligning however, the hype is so strong in regards to the current case that there is also an opportunity the market could continue, potentially breaking out of the long-term downtrend temporarily but not sustainably as the price would be extremely overextended.
Leave a comment on what you think based on your analysis is going to happen in the following days/weeks.
Thank you for your time.
RSI: On the daily chart the RSI is nearing overbought territory which puts the market in an unhealthy position as it will overextend if the price continues to the upside. Many traders use this metric; therefore, from a psychological standpoint, this indicator should express bearish signals to those who follow it.
Bear flag: This formation has held strong for quite some time having the support and resistance levels tested on multiple occasions however all trends have to come to an end and I am under the impression it should be happening sooner than later due to the bigger trend resistance, as seen in white, approaching steadily. The clash with the long-term bearish trend should result in a strong reversal following the overexertion of the current market.
The price should consolidate within this small area for a bit which will result in the RSI increasing its overbought stance before the price gradually decreases back down to the 100EMA, which it has drifted away from in the most recent run.
My stance on this particular market is going to be bearish due to all the indicators aligning however, the hype is so strong in regards to the current case that there is also an opportunity the market could continue, potentially breaking out of the long-term downtrend temporarily but not sustainably as the price would be extremely overextended.
Leave a comment on what you think based on your analysis is going to happen in the following days/weeks.
Thank you for your time.