Bitcoin’s (BTC) sideward price action of late has been a hunting ground where whales can easily liquidate misinformed traders on leverage trading platforms. Without decent swings, any asset can become boring.
But let’s not forget BTC isn’t the only cryptocurrency out there, as several altcoins are currently staging somewhat of a comeback. However, there’s one coin that doesn’t seem to be having a good time lately, namely XRP, the fourth-largest digital asset by market capitalization.
So, in today’s analysis, I’m going to look at whether holding XRP is likely to be more fruitful than BTC in the short term.
Daily crypto market performance. Source: Coin360.com
The bigger picture for Bitcoin
Starting out with the weekly chart, one can see why the bears favor this timeframe. Bitcoin is forming a massive pennant that is far clearer now than it was before the March 12 black swan event.
BTC/USD 1-week chart. Source: TradingView
Typically, pennants break toward the end of the pattern, sometimes a little before. However, they are invalidated after. As things stand for Bitcoin, a breakout or breakdown could occur any time between now and approximately September 2021, 14 months from now.
With the current price around $9,156, a small 6% increase would put Bitcoin on the resistance line, and this is why we have failed to reclaim $10,000. But at this rate, reclaiming just $9,750 would be a welcome breakthrough for the bulls.
On the flip side, there is a massive 47.42% gap from the current price to the support of the pattern. This puts a figure of $4,500 as a potential target, which may be a great opportunity to stack some sats. But is this just wishful thinking from overly aggressive bears that shout “burn this Ponzi to the ground?”
More bearish news for Bitcoin
BTC/USD one-day chart Source: TradingView
The one-day chart can be interpreted as equally bearish for Bitcoin. Using the Fibonacci retracement tool from the March 12 dump to the last time $10,500 was rejected, the price is still above 0.236. But should this level fail, then the 0.382, 50%, and 0.618 Fibs are where the action is, and this puts support levels at $7,900, $7,150 and $6,350, respectively.
While none of us hodlers want to see $6,350 or $4,500 Bitcoin, you can’t ignore the charts. However, the bull in me sees that just a 13% uptick in the price of Bitcoin is needed in order to reach the multiyear resistance of $10,500.
So, what is more likely? Number go up? Or number go down?
Short-term resistance for Bitcoin
BTC/USD one-hour chart Source: TradingView
In the short term for Bitcoin, and using now the one-hour chart as well as the Fib levels from the tip of the June 23 pump and the $8,800 bottom on June 27, we can see that Bitcoin has broken the 382 (as I type this article). Thus, following the Fibonacci structure would put the most likely resistance levels at $9,300 on the 50% Fib and $9,420 on the 618.
Should Bitcoin continue on an upward path, reaching the top of the Fib at $9,794 would invalidate the pennant structure and also wipe out the chance of $4,500 to boot.
Once the bulls are in control, then $12,000 Bitcoin is the next key level to break, and when all is said and done, this is still only a 25% increase in price. Which brings me to Ripple’s XRP, an altcoin that has piqued my interest.
XRP is the new XRP
XRP/USD one-week chart. Source: TradingView
At first glance, the XRP chart looks like any other altcoin. A huge 2017 spike followed by a monster downtrend. Anyone that looks at this chart would draw the same conclusion that this project is dead.
But is the fourth-biggest digital asset by market cap really dead? Or is it the investment opportunity of a lifetime?
Using the Fib with a massive pinch of salt, the first target being the 382 is $1.33. With XRP currently trading at about $0.175, that’s approximately a 750% return on investment. If the price continued to the 50% retracement, then that’s 900% and a massive 10-times gain if it were to reach the 0.618 level.
I like those numbers, and since XRP is somewhat of the “Ralph Wiggum” of crypto, responding rather slowly after Bitcoin and Ethereum make their moves and remaining stagnant for the majority of 2017, this could be a great speculative investment as Bitcoin looks like it’s close to its top.
The downside for XRP
XRP/USD 1-week chart. Source: TradingView
Moving down to the one-day chart for XRP, the downside doesn’t look that great. If $0.16 support fails to hold, $0.10 XRP is what the Fib retracement tool shows as a potential target.
However, there is massive buying and selling pressure for XRP on Bitfinex, between $0.17 and $0.18 with no big orders below $0.17, according to the Tensorcharts orderbook heatmap.
XRP/USD heatmap. Source: Tensorcharts
This all leaves me asking the question: Is the bottom in for XRP? But also, are we close to the top for Bitcoin?
Obviously, XRP hasn’t won as many hearts and minds as BTC, as it’s generally discounted by the crypto community due to its centralized nature, Ripple’s regular monthly sales from its escrow and its “XRP Army” supporters.
Nevertheless, XRP is currently at mid-2017 levels, while Bitcoin is already at December 2017 prices. So, which horse looks better to bet on at these levels? Obviously, you should DYOR — do your own research. But as Warren Buffet once said, “Be fearful when others are greedy and greedy when others are fearful.”
For Bitcoin, the first level of resistance is at $9,450. However, should we break this, then $9,750 is where bulls need to push toward to regain control.
Defending $8,900, which is the 236 Fib, is massive for Bitcoin right now. Should this level fail, I would be looking at $7,900 as a very real target should the bears win this battle.