Coins Kid, a cryptocurrency analyst, has shared his insights on the current XRP price action. In his latest video, he highlights a bullish divergence on the four-hour timeframe, which has prompted him to enter a micro long position on the token.
While this setup does not necessarily indicate a market bottom, it presents an opportunity for traders to capitalize on short-term price movements.
Confluence of Factors Needed for Confirmation
Coins Kid emphasizes the need for additional confluence factors to confirm a more significant trend reversal. These include a bullish divergence on the daily timeframe and a clear five-wave pattern in the price action. Until these conditions are met, the analyst remains cautious about declaring a definitive bottom for the current correction.
For those interested in the micro long opportunity, Coins Kid provides a detailed trade setup. He suggests placing a stop loss at $0.478, which represents a minimal risk of approximately 2.19%. The target for this trade is set at $0.5166, offering a potential gain of around 7%. This setup aims to capture a potential A-B-C corrective wave before a final leg down.
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Zooming out to the daily timeframe, Coins Kid emphasizes the importance of Bitcoin’s price action in determining XRP’s trajectory. He notes that if Bitcoin manages to break above a key moving average, as it did in 2021 before XRP’s massive rally, it could be a signal to accumulate XRP aggressively. A breakout above the $1.97 high could indicate a potential new all-time high for XRP.
Read more: Ripple (XRP) Poised for Potential Vertical Rally as Retracement Nears Completion
Analyzing the overall price structure, Coins Kid identifies a five-wave move up followed by an overlapping, zigzag-like corrective pattern. He interprets this as a potential flag pattern, similar to the wave two correction seen earlier. If this pattern holds, he anticipates a significant expansion once the correction is complete.
In the event of a final flush to the downside, Coins Kid highlights the importance of the 0.786 Fibonacci retracement level at 0.3821 and the “god candle” support. A wick grab at these levels could provide a final shakeout before a potential vertical move upwards.
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