The outlook for alternative cryptocurrencies appears grim relative to bitcoin as a renewed trade war potentially breaking out between the U.S. and its major trading partners may threaten to destabilize the global economy. Still, some coins are flashing bullish hints.
For instance, the XRP/BTC ratio is teasing a move above the upper Bollinger band on the monthly chart for the first time since 2017, hinting at a significant XRP bull run ahead.
Bollinger bands are volatility bands placed plus two and minus two standard deviations above the 20-period (day/week/month) simple moving average of an asset’s price.
The break above the upper band represents a bullish imbalance in the market, and prices typically maintain the lead for several days in a pattern called high momentum.
Traders who track price patterns typically jump in with longs once prices move past the upper band, which is a sign of a bullish imbalance in the market. Breakouts following prolonged consolidations between bands tend to be more reliable.
The XRP/BTC ratio surged nearly 200% following the Bollinger band breakout of April 2017, which marked a bullish resolution to prolonged low volatility trading.
Let’s see if the history repeats itself.