Bottom line: Ripple bullish structure remains intact since 0.7160 lows but an interim corrective phase could be underway towards 0.2400 levels.
Ripple bulls are in complete control after breaking above 0.3150 resistance last week. It had managed to print fresh highs at 0.3460 levels before initiating a pullback, which was expected. With bulls in control in the long term, we expect a corrective phase towards 0.2400 levels and it might have begun since 0.3460 highs. Please note that Fibonacci 0.618 retracement of the entire rally between 0.7160 through 0.3460 is seen around 0.2400 levels. The correction might be unfolding into an A-B-C zigzag, of which Wave A could be in place at 0.2700 levels. If the above is correct, we can expect a Wave B rally towards 0.3000/100 levels before Wave C drops to 0.2400 levels to terminate Wave 2 as highlighted on the chart here. Looking into the counts since 0.7160 again, Ripple might have unfolded into 5 waves producing a lower degree Wave 1 at 0.3460. Ideally, a 3 wave corrective drop is expected to retrace lower and terminate into Wave 2. We can expect a sharp Wave 3 rally after that could push through the next resistance at 0.5000 levels. Overall Ripple stays into a strong bull run that could last for the next 12-15 months, taking prices up to 0.8000/1.0000 and higher. As a larger picture, a higher degree Wave (3) has resumed since 0.7160 lows and is expected to target above 0.3300 levels over the coming months. Of the 5 wave rally within Wave (3), we have just got a lower degree Wave 1 between 0.7160 and 0.3460 levels respectively. Most traders might be willing to take some profits back home on the longs initiated earlier and stay aside for the corrective drop to materialize.
Harsh Japee, Technical Analyst.
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