Bitcoin, Ether, XRP price analysis 22 May 2019: Prices tighten
After this week's ups and downs, prices are tightening up and traders are sitting back.
The markets as a whole have remained steady in the last 24 hours with Bitcoin (BTC) holding position just shy of $8,000, but comfortable enough not to make a meaningful break in either direction. As is customary, Ether (ETH) and XRP ("the Ripples") have mirrored BTC's movements relatively closely, with occasional diversions.
Whenever you get a big move in one direction or the other, some periods of volatility will often follow until it settles into a new price range. This is well and truly on display here, with the last week seeing plenty of major price moves in both directions.
The most recent was a price spike that coincided with the CBS show 60 Minutes covering Bitcoin in detail, and it was followed by some price aftershocks.
But as you can see, Bitcoin has started trading in a narrower range over the last couple of days. Now traders are increasingly sitting back, catching their breath and counting their money (or their losses) while they wait for the next big move. This is reflected in the declining volume (candles on the bottom row) of the last few days.
Ether has had a big week in the markets, if not in the news. Overall, it's mirroring BTC prices but with extra volatility – as is typical.
Most notably, its volumes have been exceptionally high recently. In the big dump on 20 May, it hit its highest notional volume on Coinbase since December 2017, right at the height of the bull run.
Notional volume is the volume as measured in USD, so it's a combination of the amount of Ether being moved as well as its USD price. More Ether was moved in the big dump on 17 May, but its total USD value was less than the amount sold a few days later on 20 May.
The glum way of looking at this is that traders are twitchy and ready to quickly sell in vast amounts when there are profits to be taken or if it looks like a drop is imminent. But the happy way of interpreting it is that those two big drops exhausted a lot of the selling pressure, paving the way for a more civilised rise.
XRP has had an interesting week, and like other coins, seems to be reaching an inflection point of sorts.
It naturally reflected the Bitcoin dump of five days ago, and broadly mirrored Bitcoin prices too, but its movements may carry extra significance given its price oddities over the last year. In September 2018, it more than doubled to over 50 cents even as the rest of the crypto markets remained flat. It didn't properly yield that price range until November.
This is reflected in XRP's longer term moving average (MA), such as the 200-day MA (the yellow line).
Analysts have spent some of the last week getting excited about XRP's performance relative to that because it might signify that XRP has started punching above its weight even when you take into account those days in the 50 cent range late last year. Indeed, when you add a shorter term moving average, such as the 50-day (red line), you can get a clearer picture of how XRP is really performing.
Note that as you get to the pointy and more recent end of the chart, the 50-day and 200-day moving averages start oscillating across each other more frequently. This is basically the bears and bulls fighting, as people say.
But one of the signs that has people optimistic in the short term is the fact that the red line broke away from the pattern towards the end, and came out on top of the yellow line. The reason this is considered good news is because it shows what might not be apparent from the prices alone.
It shows that despite the drop on 20 May, and despite the ups and downs day to day, XRP is currently trending upwards relative to its own performance in previous months.
But as the ancient adage goes, past performance is no guarantee of future returns.
Disclosure: The author holds BTC, BNB, ATOM and IOTA at the time of writing.