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In this article, U. Today is going to analyze XRP’s price behavior. Let’s take a look at its daily chart.
As you can see, the price is maintaining itself below all three moving averages. It’s no secret that we are in the downtrend, giving individuals the opportunity to short the coin or to buy it at a lower price. In the former case, everything goes well for market participants with a bearish outlook. But for those who are bullish, the first try fails at the $0.30 levels. Now, the bullish ones have another opportunity.
Let’s try to find the answer – why now. After a long period of time, the Moving Average Convergence/Divergence (MACD) line is making every new peak higher than the previous peaks. Some experienced traders might say this is not a divergence because the line has broken away from zero a few times. However, it looks pretty familiar to previous bounces, especially when they are in conjunction with an oversold relative strength index (RSI) (like right now). Usually, all those signs are bullish.
If we take a closer look at the four-hour scale, the situation is the exact opposite. The MACD is making every new peak smaller than the previous one, and the RSI signal line has already jumped out from the oversold area (14% growth by the way). When we look at the general picture, this does not inspire growth.
When we try to analyze XRP’s price behavior, we usually do this through the exchanges or by using the charts of the most liquid exchanges. Below you will find the most liquid exchanges classified by volume.
For example, let’s say it’s Binance. The chart won’t be that different from the Bitfinex chart, which was used in this article. However, what if we take the Poloniex chart, which has an earlier price behavior date (see below).
It is from here that we will find something new. As you can see, there was a significant amount of time to consolidate before the terrible growth. That is the logic of supply and demand in the market. We have an accumulation phase (at the start like Poloniex), continuing growth, and a distribution phase. That is not what the crypto community expects.
As you may understand, most market participants use the charts of the most popular and most liquid platforms. They have to rely on this tiny stop within the $ 0.14 – $ 0.30 range, which technically can be an area where short positions close (meaning purchases). In other words, this is the demand zone where the bulls may take advantage of the situation.