- Bitcoin price continues to trade in a range that has lasted all December.
- Ethereum price awaits entry for an explosive move higher.
- XRP price begins to trigger a massive short-squeeze, likely leading the majors in early 2022.
Bitcoin price recently triggered a theoretical long entry; signaling upside potential remains strong. Ethereum price positioned a rally in excess of 50%. XRP price remains under pressure from technical and fundamental factors – but that is about to change.
Bitcoin price continues to congest, breakout coming soon
Bitcoin price action has been stuck between the $46,000 and $50,000 value areas for the entirety of December. While the daily candlestick chart shows a downside continuation setup in the form of a bear flag, the Point and Figure chart shows something a little different.
The most recent analysis identified a Pole Pattern on Bitcoin’s $500/3-box reversal Point and Figure chart. The theoretical long setup for Bitcoin price was a buy stop on the 3-box reversal, which triggered $48,500. The stop loss is a 4-box stop, currently at $46,500, and the profit target is $63,000. The hypothetical trade setup represents a 7.25:1 reward for the risk setup, with an implied profit target 30.5% above the entry.
The trade setup is still valid as Bitcoin has returned below the entry level, allowing traders to enter a new position they missed or add to an existing long position. New positions should utilize a trailing stop of two to three boxes to protect any profit made after the entry is triggered.
BTC/USD $500/3-box Reversal Point and Figure Chart
Downside risks to Bitcoin price remain. This time of year is notorious for volatility and whipsaws in price action. Watch for any move below the $46,000 value area, which could trigger a flash crash to the low $30,000 price range.
Ethereum price positioned to hit $6,000
Ethereum price awaits a clear breakout to hit a critical entry zone identified on December 30. The hypothetical trade setup remains valid.
The hypothetical long entry for Ethereum price is a buy stop order at $4,000, a stop loss at $3,500, and a profit target at $6,000. This trade represents a 5:1 risk for the reward and 52% implied gain from the entry. A trailing stop of two to three boxes would help protect any potential profit after the entry is triggered.
ETH/USD $100/3-box Reversal Point and Figure Chart
This trade setup is invalidated if Ethereum price moves to $3,300. Ethereum would likely see a bearish setup to target the $2,800 value area in that scenario.
XRP price develops bullish reversal pattern, trapping short-sellers
XRP price action, more than Bitcoin or Ethereum, will give weak hands and bear a run for their money. A Spike Pattern was recently completed on XRP’s $0.01/3-box reversal chart. The entry condition on a Spike Pattern is simple: the 3-box reversal.
The possible long setup for XRP price is a buy stop at $0.85, a stop loss at $0.81, and a profit target at $1.10. This trade represents a 6.25:1 reward for the risk with an implied 30% gain from the entry. A two to three-box trailing stop would help protect any implied profits made post entry.
XRP/USDT $0.01/3-box Reversal Point and Figure Chart
Traders should expect resistance at the $1.00 value area and be prepared for momentum to carry XRP price through $1.00 as it has been tested considerably during December.