XRP remains in correction mode. It poked just under the target range of .24 given very early in the correction. The current level sits at support from the wave 1 top and previous head and shoulders neck line (black line). We are also at the precise downward projections from the recent head and shoulders top, and the equality level between wave a and wave c.
This is a good reversal zone with technical support, but the intraday chart does not show an impulsive recovery upwards (which should occur in 5 waves. We also haven’t broken any key resistance levels. The intraday chart shows a consolidation, which can be viewed as either a triangle or rectangle in progress. Notice the overlapping 3-wave patterns in the chart below. This is happening simultaneously in many other cryptos.
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If this is wave 4 of C, then this leg down should end after the next move. Measurement of a downward thrust from this triangle would bring us into the 22 cent range, exactly at the 50% retracement level. I’m anticipating fairly dynamic upside once this correction is over. It shouldn’t be hard to miss.
Triangles usually precede quick moves, which makes sense from a supply and demand perspective. For whatever reason, there’s a pretty solid “sell wall” just under the 24.5 cent level. As the price pops back down, bullish investors see a bargain and buy at slightly higher and higher levels until buying and selling reaches an equilibrium. Either the buy pressure or sell pressure will run out of ammo and collapse, triggering a quick move in one direction until the market matches supply and demand at the next stable price level. Based on the location in the Elliott wave count, this one is more likely to break lower rather than higher.
We’ll be on the lookout for a possible reversal this week!
Happy Trading!