BTC recently showed a theoretical long setup; signal that the upside is still strong. Ethereum is also positioned for a rally of over 50%. XRP remains under pressure from technical and fundamental factors – but that is about to change.
BTC price continues to stagnate, the breakout will happen soon
BTC was mostly stuck in the $ 46,000 to $ 50,000 range in December. While the daily chart shows a persistent bearish lineup in the form of a bear flag, the Caro (point and figure) chart shows otherwise.
The chart is defined as a $ 500/3 box reversal. A hypothetical long entry is a 3-box reversal buy-stop order that triggers $ 48,500. The stop loss is 4 stops, currently at $ 46,500 and the profit target is $ 63,000. The hypothetical trading setup offers an RR (reward / risk) ratio of 7.25: 1, with an implied profit target of 30.5% calculated from entry.
Caro Chart BTC / USD $ 500/3-box reversal | Source: TradingView
The downside risk for BTC remains. This time of year is famous for the extreme volatility of price movements. Watch for any move below the $ 46,000 value zone as this could result in a flash crash into the $ 30,000 region.
$ 6,000 goal for ETH
Ethereum is waiting for a clear breakout to trigger the setup identified on December 30th. This hypothetical trading setup is still valid.
The hypothetical entry for Ethereum is a buy stop at $ 4,000, with a stop loss at $ 3,500 and a profit target at $ 6,000. This trade offers an RR (risk / return) ratio of 5: 1 with an implicit profit target of 52% from entry. A two to three cell stop helps protect potential gains once the entry is triggered.
Caro chart ETH / USD 100 $ / 3 box inversion | Source: TradingView
This trading setup will be void if it drops to $ 3,300. Ethereum could form a short setup aiming at $ 2,800 in this case.
XRP develops bullish reversal pattern, establishes bear trap
The XRP price action looks more optimistic than Bitcoin and Ethereum. A spike pattern was recently completed on the $ 0.01 / 3-box reversal chart. The condition to initiate a position on the spike pattern is simple: reverse 3 cells.
The long setup for XRP is a buy stop at $ 0.85, a stop loss at $ 0.81, and a profit target at $ 1.10. This trade represents an RR (return / risk) ratio of 6.25: 1, with an implied gain of 30% from the entry. A two to three cell stop helps protect potential gains once the entry is triggered.
XRP / USD Caro chart $ 0.01 / 3-box reversal | Source: TradingView
Traders can expect a breakout above the hard resistance at USD 1 as it was tested multiple times in December.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.