30 April 2021 (FRI)- Ripple (XRP) Daily Risk Report

30 April 2021 (FRI)- Ripple (XRP) Daily Risk Report

By quantdoge | Daily Crypto Risk Report | 30 Apr 2021


Investment Disclaimer:

  • I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.
  • Past performance presented here is not an indicator of future performance.
  • This post expresses my own opinion about the cryptocurrency mentioned herein and is not an offer to buy or sell, or a solicitation of any offer to buy or sell the cryptocurrency mentioned in this post. 
1. Top 3 Good News for XRP HODLERS !!!
  • Another win for #RelistXRP campaign: What do these developments mean for XRP though?

    Statistic as of 2021-04-30 04:15 AM EDT: 17 positive votes, 1 negative vote

    What a difference a few months can make! Back when the year began, XRP, the cryptocurrency at the center of the lawsuit filed by the United States Securities and Exchange Commission against Ripple Labs, was valued at around $0.21. Since then, however, the crypto’s hike has been exponential, with the altcoin climbing to levels unseen […]
    (Extracted from CryptoPanic)

  • Ripple XRP vs. US SEC: How It Started, Where It’s Going, And Why It Matters
    Statistic as of 2021-04-30 04:15 AM EDT: 17 positive votes, 1 negative vote

    Here’s how it all started: About four months ago, the securities regulatory arm of the US sued Ripple Labs on the count of three charges: ⮚  ‘Raising capital to the tune of $1.3 billion via a secret sale of large undocumented digital currencies to customers. This had gone on for over eight years.’ ⮚   ‘Allegedly issuing an […]
    (Extracted from CryptoPanic)

  • Ripple wants go public after settling SEC lawsuit, SBI CEO says
    Statistic as of 2021-04-30 04:15 AM EDT: 18 positive votes, 4 negative votes

    The largest outside-Ripple shareholder believes that the XRP-related firm will go public shortly after settling its lawsuit with the SEC.
    (Extracted from CryptoPanic)

2. Top 3 Bad News for XRP HODLERS !!!

3. How Ripple Performs Relative to Other Cryptos ?

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As of 30 Apr 2021, Ripple has made a cumulative return of 722.61% since Jan 2020 and 587.47%  since Jan 2021. It is currently the 5th greatest performing crypto asset since Jan 2021 as compared to the other cryptocurrencies presented above.

4. Technical Analysis on Ripple

4.1. Volume Weighted Average Price (VWAP)

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VWAP is a technical indicator used by a trader to gauge the overall trend of an asset price movement. VWAP line (orange line) represents the volume-weighted average price (average price here is defined as the average of high, low and close prices) while close price line (blue line) represents the price when XRP is closed at the end of every single day. 

Whenever blue line (cross price) is above orange line (VWAP), it indicates that the asset is gaining momentum and being traded higher than its average price level. This would represent a 'buy' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'sell' opportunity, anticipating that the price of XRP (blue line) to fall to its average level (orange line).

Whenever blue line (cross price) is below orange line (VWAP), it indicates that the asset is losing momentum and being traded lower than its average price level. This would represent a 'sell' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'buy' opportunity, anticipating that the price of XRP (blue line) to rise to its average level (orange line).

As of 30 Apr 2021, VWAP is suggesting that XRP is gaining momentum and trading at a level higher than its average price of $ 1.15 to $ 1.20. 

4.2. Moving Average Convergence Divergence (MACD)

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MACD is often used by trader as a momentum indicator. There are 2 lines that form the above charts, namely MACD (12, 26) lines and Signal(9) line, while the histogram is calculated by subtracting Signal (9) from MACD (12,26). Histogram would fall to the negative territory whenever MACD (12, 26) is trending at a lower level than Signal (9) and rise to the positive territory whenever MACD (12,26) is trending at a higher level than Signal (9).

MACD (12, 26) is computed by subtracting the 26-day exponential moving average (EMA) of XRP closing price from its 12-day EMA. 
Signal (9) on the other hand is calculated as the 9-day EMA of MACD (12,26). 

As MACD (12, 26) goes higher away from Signal (9), it signifies that XRP is gaining momentum and whenever it goes trends at a lower level than Signal (9),it signifies that XRP is losing momentum. 

As of 30 Apr 2021, MACD is suggesting that XRP is losing momentum.

4.3. Bollinger Band

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Bollinger band is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. Its chart made up of 4 lines, namely:

- SMA (20) (blue line), which is the 20-day simple moving average price of XRP
- Upper Band (orange line), which is computed by adding 2 standard deviations of XRP on SMA (20)
- Lower Band (red line) , which is computed by subtracting 2 standard deviations of XRP from SMA (20)
- Close (green line), which is the daily closing price of XRP

Whenever close line (green) touches the lower band (red), it indicates that XRP is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever close line (green) touches the upper band (orange), it indicates that XRP is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 30 Apr 2021, Bollinger Band is suggesting that XRP is trading near its fair value (i.e. neither overvalued nor undervalued).

4.4. Relative Strength Index (RSI)

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Just like Bollinger Band, Relative Strength Index is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. There are 2 psychological levels, i.e. 30 and 70 in RSI. Whenever the RSI reaches 30, it indicates that XRP is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever RSI reaches 70, it indicates that XRP is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 30 Apr 2021, RSI is suggesting that XRP is trading at a fair level without being oversold nor overbought.

Based on the technical analysis presented above, quantdoge holds a neutral stance on the short-term price outlook of XRP, but I could be wrong, hence please make your careful due diligence before making any financial decision. 

5. Ripple Risk Profile

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Based on the 100-day 95% historical Value-at-Risk (VaR) profile of Ripple defined above, XRP seems to trade at a lower risk level on 30 Apr 2021 as compared to 10 days before on 20 Apr 2021, with its biggest pullback being seen at 28.83% on a single day during the last 100 days. However, I could be wrong, hence please make your careful due diligence before making any financial decision.

6. Price Simulation for Ripple

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How did quantdoge simulation perform vs the actual XRP price movement over the last week ?

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Over the last 7 days, XRP has been trading in line with the expected values of quantdoge simulations, indicating that XRP was trading near its fair value over the last week.

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If you are into Ethereum (ETH) and Binance Coin (BNB), I have made similar analysis on them at:

If you like my analysis and articles, please follow me at @quantdoge for daily updates. 

 

 

 

 

 

 

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quantdoge
quantdoge

Data scientist in crypto and blockchain space.


Daily Crypto Risk Report
Daily Crypto Risk Report

This blog was created by quantdoge, a data scientist in the cryptocurrency and blockchain space to publish daily risk reports on different cryptocurrencies. All published reports in this blog were analyzed with in-house algorithmic trading and quantitative risk management technology. ** Investment disclaimer: ** I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.

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