Quick Note: *The title to this says unfinished because I wanted to get to reviewing the Q3 quarterly report that Ripple published earlier this month; I ended up getting side tracked and turning this into a full blown price analysis - which is fire, might I add - so enjoy!
In light of the recent positive price action for Ripple and the release of their latest quarterly report, it seemed prudent to dig through that quarterly report to see if the hype surrounding the idea that Ripple has 'changed' is really true or not.
Another Quarterly Report Boost
Curiously, we saw similar price action from Ripple the last time that they published their quarterly report (Q2 2020).
This phenomenon was recorded by CoinTelegraph at the time, which published the following:
"According to Ripple’s quarterly report released on August 3, sales of the firm’s XRP token were 18.6 times higher in Q2 2020 compared to Q1. The crypto firm stated XRP sales were $32.55 million from April to June this year, up from $1.75 million in the first quarter. The company has been criticized for propping up its balance sheet with XRP sales."
The article then provides the following price observation:
"Cointelegraph reported today that the price of the XRP token has rallied 40% in the past seven days and nearly 8.5% in the last 24 hours. Many predict that the token may even surge to $0.30 if Bitcoin (BTC) — currently at $11,346 — remains stable."
Editor's Note: Unfortunately, CoinTelegraph's forecast ended up being horribly inaccurate.
Taking it to the Charts
If memory serves correct, the date for that Q2 quarterly report was August 3rd, 2020.
It appears that CoinTelegraph slightly understated the price gains for Ripple.
From the chart above, we can see that the price has appreciated +59.95% over the past 13 days.
Since we're here, we might as well chart out a few things.
Describing and Dissecting Our Charts
In the previous photo published above, the chart was overlaid with a custom indicator called the, 'Librehash Reversion Ribbon V2'.
This scripted indicator functions in many ways exactly like the MACD (Moving Average Convergence Divergence indicator). Which means that many of the same principles that apply to the MACD, also apply to the Librehash Reversion Ribbon V2 as well.
Below are some of the enhanced features that come with the Librehash Reversion Ribbon V2, however:
Candles change colors on the basis of the bullish / bearish momentum (different shades as well for a more granular interpretation of the actual buy / sell pressure for the underlying asset)
The ribbon changes gradients as well (which provides an additional signal other than 'one line crossing over the other').
The Reversion Ribbon V2 uses different MA (moving average) lines to form the 'ribbon' itself. Specifically, the exponential moving average, coupled with the LSMA was utilized in tandem (mathematically), to provide a more accurate 'signaling' of the ribbons.
Beyond that, the overhead diagonal downtrend resistance was mapped out as well:
From the photo above, we can see that Ripple busted above the overhead diagonal downtrend resistance on November 5th, 2020:
Its also worth noting that the volume doesn't really reflect a big "burst" of buy volume in the way that we'd expect to be accompanied with a break over a somewhat lengthy overhead diagonal downtrend resistance.
The +20% price appreciation following the break, however, is nothing to discount.
This is especially true when considering the fact that the candles for the most recent periods (on the daily resolution) each have long bodies (which means that the gains were not ephemeral).
The above photo shows the two most recent candles on the daily resolution.
Taking a Look at the Balance of Power RSI for Ripple
Quick lesson (one more time) about the Balance of Power RSI.
This is a custom indicator premised on the 'Balance of Power' indicator on TradingView.
What is the 'Balance of Power' Indicator?
As the photo above suggests, one of the best ways to utilize the Balance of Power indicators is to, 'Find divergences between the price and the BoP in order to identify a potential trend reversal or trend continuation setup.'
Specifically, we were able to milk the Balance of Power to maximize this facet of the indicator's measurements by creating an upper & lower bound restricted to an overlaid 'RSI'-like range to provide a sense of when the buy / sell pressure are above or below average, respectively.
Going further, we also 'smoothed out' the Balance of Power by applying the EMA to the RSI(14) values of the raw Balance of Power metric readings.
The result is the following, which tells us that Ripple's bullish price momentum is through the roof:
Remember, the Balance of Power, specifically, is one of those indicators that will almost always give us divergence with the price (serving as a premature signal for an impending reversal in trend).
So the fact that we don't see any such indication from this indicator on the daily resolution means great things for bulls.
Relative Strength Index (14)
Now let's take a look at the Relative Strength Index [RSI(14)].
Specifically, we'll be leveraging the 'Librehash RSI', which takes the regular RSI but applies a backend formula (combination of Rate of Change & EMA of the Rate of Change of the RSI values), to produce a more accurate sense of when the RSI is performing at an accelerated (increasing) or decelerated (decreasing) rate.
In essence, this programmatically handles the riddle of 'higher highs', 'lower highs', etc., when attempting to determine the overall trend of the RSI (to get a gist for whether it is trending on the rise or not).
So let's take a look at the RSI(14) below:
From the chart above, we can see that the RSI(14) has rocketed into the 'overbought' territory over the past few days.
This is not bearish though - much the opposite, its extremely fucking bullish.