Bitcoin (BTC) price has seen a significant increase in 2019 (by more than 100%), while altcoins are actually down significantly from the beginning of the year.
Moreover, most altcoin/BTC pairs have been hitting new lows, and many of the coins are still trending downwards, looking for potential support.
Crypto market daily performance. Source: Coin360
One of these coins is XRP (XRP), which has seen a decrease of 50% over the year, going from $0.39 to $0.195. Will 2020 be a similar year for XRP and altcoins, or can we see a switch in momentum? A new analysis is warranted.
XRP hitting new lows in USD value
It was a bad year for the XRP investor, with the price hitting new lows over and over again.
XRP USD 1-day chart. Source: TradingView
Price held the $0.30 support throughout the beginning of the year. However, XRP wasn’t able to provide a higher high and continued making lower highs. These lower highs confirmed the downtrend and eventually, the breakdown of the $0.30 support level.
Later in the year, the $0.30 level was tested for resistance and confirmed, as can be seen with the rejection earlier in November. This rejection started a new downwards trend, which temporarily ended with the latest low at $0.176. The last time this price level was seen was in November 2017, before a huge rally occurred for XRP.
BTC pair resting on the crucial support
XRP BTC 4-day chart. Source: TradingView
The XRP/BTC pair is also continuing to trend down. This can be seen in the chart above, which shows that XRP started the year around 0.000096 and is currently near 0.000026. In other words, XRP has lost roughly two-thirds of its value against Bitcoin in 2019.
However, some exciting signals are given from the chart. First of all, there’s a substantial bullish divergence still being applied. Similar divergences were found during the lows in November 2015 and at the beginning of January of 2017. This divergence marked a trend reversal before XRP made a 5,500% move.
Crucial for the XRP/BTC pair, however, is holding the green zone as support. A retest of the lows of September 2019 is not a bad sign. However, a higher low needs to construct to sustain the validity of the bullish divergence.
Similar to other altcoins, XRP is facing a significant downtrend. This red diagonal line has been a trend entrenched for more than a year. Breaking that line to the upside would potentially stage a big move to the upside.
What will 2020 bring in general?
2019 was not the best year for the average investor in altcoins. Many of them have seen a red year with double-digit losses, despite some select altcoins seeing massive growth.
Chainlink (LINK) surged 1,500%, Binance Coin (BNB) rallied 650%, and even Matic Network (MATIC) has seen a rise of 1,360%. However, the big caps didn’t see these numbers, so the question arises: what will 2020 bring?
Altcoin dominance chart. Source; CoinTrader.Pro
By analyzing historical charts, the first quarter of the year tends to be the best period to trade altcoins. The altcoin dominance broke out to the upside in January 2016, causing Ethereum (ETH) to rally 1,900%.
Similarly, January 2017 led a significant breakout as well, identical to the movements of January 2018, which made Ethereum hit its high of $1,440.
Is the market cycle comparable to January 2016?
Looking closely at market cycles is something that every analyst tries to do. Particularly, people like to compare the last top of Bitcoin with the high of Bitcoin in December 2017.
However, the market saw a similar parabolic move in December ‘15, but with a big difference. The market had hysterical euphoria during the bull-run of December 2017, while nobody was interested in Bitcoin during a similar parabolic move in 2015.
Through that, it’s more natural to compare the current market with the beginning of the last cycle, as there’s about as much euphoria right now as at a funeral.
XRP looking similar to December 2015
XRP USD 2-day chart. Source: TradingView
If we analyze XRP against USD again, then the market is showing similarities with the period in December 2015. Similar to then, price broke below the support of a range and reached the next support level (blue horizontal line in both cases).
Additionally, the price is showing a significant downtrend. Breaking this downtrend would potentially lead to a substantial move to the upside, which could push XRP to $0.48, leaving bears in disbelief.
Ethereum facing a similar downtrend
ETH BTC 2-day chart. Source: TradingView
Not only is XRP facing a significant downtrend, but Ether has also had a pretty lackluster year overall.
ETH price is a prime example of an excellent first quarter of the year. In fact, since Ethereum’s launch, ETH has always provided a bullish Q1. During 2016 and 2017, massive downtrends were broken to the upside, while 2018 saw its peak value in USD.
There was even a 60% gain during the bear market at the beginning of 2019. But Ether is nevertheless in a two-year downtrend.
Concluding, Ether, and other big caps have to start making moves soon, given that they are facing these downtrends. And the overall rule is; when big caps begin to move, the rest will follow. Therefore, if ETH starts to move up (it may or may not be due to Ethereum 2.0), most of the ERC-20 tokens will likely follow suit and possibly kickstart the so-called “altseason” that never quite happened in 2019.
Happy New Year!
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of CryptoX. Every investment and trading move involves risk. You should conduct your own research when making a decision.
