We recently saw the Ripple token, XRP rally sharply against the USD. I noted that we might see it consolidate a little. It has been consolidating in a very short-term triangle during the 12/15 session against both the US Dollar and Against Bitcoin.
- A triangle, or coiling consolidation reflects an exhausted market.
- It also shows that after a sharp run up, the excitement is cooling off.
- It really can break either way, but with such a strong prevailing bullish swing, its more likely to break higher.
- In this bullish scenario, I think we should limit the upside to 0.88 for now.
- These 2 charts look similar because 1) ripple has been rallying faster than bitcoin in the past week and 2) bitcoin did not move much against the USD during the 12/15 session, so triangles formed against BTC and against USD.
Dynamics between Bitcoin, Ripple and the US Dollar:
We should focus on the XRP/BTC chart because as a trader, it's easier to purchase Ripple with Bitcoin than with US Dollar.
XRP could move up against the USD but not against BTC. In this scenario, BTC is likely moving higher against USD, in which case, we probably should wait.
When BTC cools off, there's a stronger likelihood that the flow will go into Ripple.