Ripple’s XRP: The Longer The Base, The Higher In Space

Most cryptocurrencies follow traditional market and chart principles remarkably well. Ripple’s XRP is a great illustration of this. It has respected in recent years and months the old principle ‘the longer the base, the higher in space.’ Read in this article why this principle is long term bullish for Ripple’s XRP, and how ‘the longer the base, the higher in space’ underpins our Ripple XRP forecast and why XRP will become the largest cryptocurrency.

Let’s apply old market wisdom to new assets: cryptocurrency, in particular Ripple’s XRP token.

When it comes to Ripple’s XRP we believe this old saying is highly relevant: ‘the bigger the base, the higher in space.’ Essentially, what this means is that the longer a sideways consolidation period the more bullish power because there are less sellers in that market.

 It may not be clear to many, it may sound strange, but crypto markets follow amazingly well classic chart principles. The only reason why it might not be clear is that things move 10x faster in crypto land. They also move 10x higher. Hence, there is 10x more emotion involved in crypto investing.

How comes, and what does it mean for crypto investors?

Ripple XRP: the longer the base, the higher in space

In our 100 investing tips we dedicated a whole section to the principle ‘the bigger the base, the higher in space’. In sum this is what stands out in terms of why and how this principle works.

  1. Whenever prices reach the upper end of the range sellers take action. But when prices get down to the bottom of the range buyers step up. This goes on for a longer than average period of time until it resolves itself in one direction or another.
  2. Consolidations are very frustrating both for traders and investors. The vast majority of market participants show no patience. They sell with a loss, only to forget about the particular opportunity. Mostly, when they return, they feel frustration that they missed the opportunity only to find themselves chasing prices higher.
  3. Essentially, during sideways trading, sellers tend to leave the market with every peak that is set. If a consolidation goes on for a long time there are hardly any sellers left. That’s the ideal market condition to create a new bullish trend.
  4. The psychology behind this has to do with the fact that participants are just worn out of that market and recognize the opportunity cost they’ve had to endure while waiting for a resolution. By the time the market breaks out, it’s just been too painful to remain in the trade. And that’s when Mr. Market resolves in an explosive move.
  5. One recurring characteristic is the ‘false breakdown’ right before the explosive breakout takes place. This is where the saying applies “from false moves come very fast moves in the opposite direction.
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