The sideways price action of Bitcoin (BTC) has recently been a hunting ground where whales can easily liquidate ill-informed traders on leveraged trading platforms. Without decent balancing, any asset can become boring.
But let’s not forget that BTC is not the only cryptocurrent that exists, as several altcoins are currently making a certain comeback. However, there is one piece that doesn’t seem to be having any fun lately, namely XRP, the fourth digital asset in terms of market capitalization.
Thus, in today’s analysis, I will consider whether holding XRP is likely to be more successful than holding BTC in the short term.
Daily performance of the cryptography market. Source: Coin360.com
Bitcoin’s overall situation
Starting with the weekly graph, we can see why bears favour this calendar. Bitcoin forms a huge pennant that is much clearer now than it was before the Black Swan event on March 12.
BTC/USD table over one week. Source: TradingView
Usually the pennants break towards the end of the pattern, sometimes a little before. However, they are invalidated afterwards. As things stand now for Bitcoin, a break or failure could occur at any time between now and about September 2021, 14 months from now.
With the current price of about $9,156, a small increase of 6% would put Bitcoin on the resistance line, and that’s why we failed to recover $10,000. But at this rate, recovering only $9,750 would be a welcome breakthrough for the bulls.
On the other hand, there is a huge 47.42% gap between the current price and the support of the model. So the $4,500 figure is a potential target, which could be an excellent opportunity to put support in place. But is it just wishful thinking from overly aggressive bears screaming “burn that Ponzi scheme”?
More pessimistic news for Bitcoin
CTB/USD overnight chart Source: TradingView
The 1-day chart can be interpreted as also being bearish for Bitcoin. Using the Fibonacci retracement tool from the March 12th dumping to the last time $10,500 was rejected, the price is still above 0.236. But if that level fails, then the 0.382, 50% and 0.618 Fibs are where the action is, and that puts the support levels at $7,900, $7,150 and $6,350, respectively.
While none of us, the hoddlers, want to see 6,350 or 4,500 bitcoins, you can’t ignore the graphs. However, the bull in me sees that all it takes is a 13% increase in the price of bitcoin to reach the multi-year resistance of $10,500.
So, what’s more likely? That the numbers are going up? Or that the numbers are going down?
Short-term resistance for Bitcoins
One-hour CTB/USD chart Source: TradingView
In the short term for Bitcoin, and now using the one hour graph and the Fib levels since the peak of the pump on June 23rd and the $8,800 bottom on June 27th, we can see that Bitcoin has surpassed 382 (as I type this article). Thus, following the Fibonacci structure, the most likely resistance levels would be $9,300 on the 50% Fib and $9,420 on the 618.
If Bitcoin continues on its current path, reaching the Fib peak at $9,794 would invalidate the flag structure and also destroy the $4,500 chance.
Once the bulls are under control, $12,000 of Bitcoin is the next key level to cross, and in the end, it’s still only a 25% increase in price. Which brings me to Ripple’s XRP, an Altcoin that has sparked my interest.
XRP is the new XRP
One week XRP/USD table. Source: TradingView
At first glance, the XRP chart looks like any other Altcoin. A huge peak in 2017 followed by a monstrous downward trend. Anyone looking at this chart would come to the same conclusion: this project is dead.
But is the fourth numerical asset in terms of market capitalization really dead? Or is it the investment opportunity of a lifetime?
Using the Fib with a huge pinch of salt, the first target being the 382 is $1.33. With the XRP currently trading at about $0.175, that’s a return on investment of about 750%. If the price continued to trade at 50%, it would represent 900% and a massive 10-fold gain if the price reached 0.618.
I like these numbers, and since XRP is a bit of the “Ralph Wiggum” of cryptography, reacting rather slowly after Bitcoin and Ethereum have made their moves and remaining stagnant for most of 2017, this could be a great speculative investment as Bitcoin seems to be close to its peak.
The other side of the coin for the XRP
Graph XRP/USD over 1 week. Source: TradingView
If we look at the one-day chart for XRP, the disadvantage is not so great. If the $0.16 support does not hold, the $0.10 XRP is what the Fib Tracing 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 large orders below $0.17, according to the Tensorcharts order book heatmap.
XRP/USD heatmap. Source: Tensorcharts
All this leaves me to ask the question: Is the bottom line in favour of the XRP? But also, are we close to the top for Bitcoin?
Clearly, XRP hasn’t won as many hearts and minds as BTC, as it is generally dismissed by the cryptographer community due to its centralized nature, regular monthly sales by Ripple through its escrow and its supporters of the “XRP army”.
Nevertheless, XRP is currently at mid-2017 levels, while Bitcoin is already at December 2017 prices. So, which horse is 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 resistance level is $9,450. However, if we go above that level, it’s around $9,750 that the bulls have to go to regain control.
Defending $8,900, the 236 Fib, is a huge task for Bitcoin right now. If this level failed, I would consider the $7,900 a very real target if the bears won this battle.
The views and opinions expressed here are solely those of @officiallykeith and do not necessarily reflect those of Cointelegraph. All investments and business transactions involve risk. You must do your own research when making a decision.