Ultimate Guide to Crypto Fibonacci Retracement Levels: Bitcoin & Altcoin Trading by Crypto Account Builders Coinmonks

https://www.beaxy.com/ can be the perfect companion in the extremely demanding world of crypto trading. The same can be applied with a downtrend Fibonacci retracement, providing you with precise opportunities for short positions and buybacks. Once the price reaches the 0.236 line ($47,296), the trader can safely close the short position with an ~8% gain. Price does not move in a straight line; it goes through a series of pullbacks, forming something like a zig-zag pattern.

What Are Fibonacci Retracement Levels, and What Do They Tell You?

Because Fibonacci ratios represent growth, they commonly appear in financial markets at price zones of psychological importance and be implemented as part of a crypto trading strategy. When it comes to crypto trading, investors are always seeking a competitive edge. They will draw trend lines to form chart patterns, turn on a series of technical indicators, or anything else they can do to gain even the slightest advantage. The next significant resistance is staying near the $51,800 level.

An Italian mathematician named Fibonacci developed a sequence that can be found in both nature and mathematics and named after himself. When traders in the financial industry examine a price chart to look for potential turning moments, they make use of these indicators. Fibonacci retracement levels are also considered a predictive technical indicator since they attempt to identify where prices may be in the future.

What Is The Golden Ratio?

Shallow retracements occur, but catching these requires a closer watch and quicker trigger finger. Focus will be on moderate retracements (38.2-50%) and golden retracements (61.8%). In addition, these examples will show how to combine retracements with other indicators to confirm a reversal. Consider each level a psychological support or resistance level after it is drawn.

Each retracement is derived from the vertical “trough to peak” distance divided by ratios in the Fibonacci sequence. Examples of the Fibonacci sequence in nature are seemingly endless and this expands to trading when it comes to analyzing price action. Any opinions, news, research, predictions, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. Based on depth, we can consider a 23.6% retracement to be relatively shallow.

How to Use Fibonacci Retracement Tools to Trade Bitcoin

In the example below, XRPUSD found support at 0.618 and 0.786 temporarily at several pullbacks before eventually losing the levels. Losing each level caused a strong reaction due to the large number of orders in these areas. Findings suggest that the universe is shaped in the form of a dodecahedron and the golden ratio is found all throughout the universe in and in nature – even in our own solar system. A year on Venus is 225 days, which is roughly the 0.618 Fibonacci ratio of Earth’s cycle.

Despite the BTC sell-off, the Bitcoin price prediction remains bullish as long as it remains above the $17,000 support zone. Let’s have a look at a Fibonacci extension and retracement example to see how it can help you determine price targets in a downtrend. In the chart below, we placed our Fibonacci bottom level at a major support line on $3,600 for ETH/USD.

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Pair, there was also a breach below a connecting bitcoin fibonacci levels today trend line with support near $50,800. The pair is currently trading over $50,000 and the 100 period SMA. If you had some orders either at the 38.2% or 50.0% levels, you would’ve made some mad pips on that trade. Market trends are more accurately identified when other analysis tools are used with the Fibonacci approach.

For example, Venus orbits the sun in 224.6 days, while Earth at 365.2 days. This creates a ratio of 8/13 — both Fibonacci numbers — which is roughly 0.618. Receive live alerts on sudden market swings and upcoming DeFi projects. To have the Fibonacci retracement explained, we can divide each number by the next one and obtain a ratio of 68.1%. When we divide it by the number two places to the right, we obtain 38.2%.

The current price of Ethereum is $1,177, with a 24-hour trading volume of $9 billion. CoinMarketCap currently ranks #2, with a live market cap of $144 billion. The current price of Bitcoin is $17,469, and the 24-hour trading volume is $25 billion. Since yesterday, the price of Bitcoin has dropped by more than 1%. Despite having broken through a critical resistance level of around $18,150, Bitcoin is trading adversely.

To answer this question, let’s first explain how to use the Fibonacci retracement in practice. To achieve this, traders choose Fibonacci swing high swing low price points on the chart. You only need to choose low and high price swings relevant to your analysis and the price at which you are trading. The Cheat Sheet is based on end-of-day prices and intended for thecurrent trading sessionif the market is open,or thenext trading sessionif the market is closed. An illustration diagram for how to draw a Fibonacci retracement for a downtrend. We cover BTC news related to bitcoin exchanges, bitcoin mining and price forecasts for various cryptocurrencies.