The crypto market has been surging in the past two months on speculation that Trump would be exceptionally friendly towards the industry. Given his and his wife’s own recently launched meme coins, there’s little reason to doubt that argument. One of the biggest altcoins, Ripple, has been on the rise, as well. Earlier this month, its price reached a new all-time high of $3.40 for a market cap of nearly $200B after having spent most of the past three years hovering around 50 cents a coin.
The question is, should traders extrapolate the recent surge into the future or brace for this record pump to be followed by an inevitable dump? Elliott Wave analysis seems to be giving us a clear answer.
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This weekly logarithmic price chart shows that the ups and downs of the market cap of Ripple have produced a textbook five-wave impulse. The pattern is labeled I-II-III-IV-V, where wave II was a simple a-b-c zigzag, while wave IV, taking the guideline of alternation into account, was a triangle correction, marked a-b-c-d-e.
According to the Elliott Wave theory, a three-wave correction in the opposite direction follows every impulse, usually erasing the entire fifth wave. For the price of Ripple, this would mean a decline back to the support of wave IV near 50 cents a coin. How far can the current bull run go before that happens is anyone’s guess. Since this is a logarithmic chart, the market cap of Ripple might as well double from here in wave V without changing the pattern much.
But triangle corrections always precede the final wave of the larger sequence, which tell us that the current rally is indeed the last one before a major decline occurs. So, everyone must decide for themselves whether chasing it is worth the risk or not. Personally, we’ll just watch from a safe distance. Not to mention that except for the price, nothing has really changed since Jason Bloomberg wrote in Forbes that Ripple, similarly to Luna, Terra, FTT and many others, is likely a scam.
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