Bitcoin Analysis and Its Secret Love for Fibonacci Levels


Long utilized in disciplines like artwork and structure, the Fibonacci sequence can be extremely helpful for analyzing Bitcoin tendencies.


Before we get into the evaluation of Bitcoin (BTC) 00, I wish to familiarize our readers with Fibonacci Numbers.

I’ve been finding out the Fibonacci sequence and its functions in investing and buying and selling for over a decade, and discover it a really fascinating subject of research.

Fibonacci is a mathematical sequence devised by its namesake, Italian mathematician Fibonacci, whereas attempting to find out the breeding sample of rabbits.

Explained very merely, beginning with 0 and 1, every new quantity within the sequence is just the sum of the 2 earlier than it.
0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377…

Fibonacci Retracement and Fibonacci Extensions are quite common instruments for use in buying and selling and Investopedia did an incredible write up which you could learn extra about here.

Short-Term Analysis:

On a short-term evaluation, Bitcoin lastly discovered some motion final evening because it retested the $6500 – $6550 development line that had beforehand been a robust resistance relationship again to late July.

If you’ve got entry to TradingView, you may also entry the brief time period evaluation here.

After Bitcoin broke out above the trendline, we waited for an extended entry on the pullback. We additionally waited for a retest of the earlier resistance in hopes that it might flip into assist, which it did as you possibly can see beneath.

If you check out my chart beneath, you possibly can actually see how a lot Bitcoin respects the Fibonacci ranges on the mid-term Fibonacci development, simply in addition to it follows our short-term Fibonacci actions.

Mid-Term Analysis: 

The confluence of the .382 Fibonacci degree and the earlier resistance turned assist line was an incredible shopping for alternative as patrons stepped in assist the value.

Trading Tip: Low Volume and low liquidity markets are way more susceptible to manipulation and giant swings — technical evaluation turns into barely much less dependable at this level.

The diagonal downtrend that we’ve been watching on the day by day was lastly damaged and retested, which is the purpose of entry for escape commerce.

As seen on the chart above, Bitcoin has additionally been discovering assist on every of the Fibonacci ranges because it grinds it’s approach upwards and at the moment sits on the .382 assist.

Even although the RSI (relative power index) has gone down, this could really be seen as a constructive when the value goes up. This is called a hidden bullish divergence for a continuation. It additionally provides the RSI a pleasant reset and the truth that it bounced off of the 40 RSI is often a sign that we could also be beginning an uptrend.

Trader Tip: The Relative Strength Index (RSI) is a superb instrument for measuring overbought and oversold zones on a buying and selling chart, however has many extra makes use of and is a favourite instrument amongst skilled merchants.

If we break down from the rising channel with sturdy quantity, then I’ll fear that we’re going to see an enormous transfer down, however many of the indicators are pointing to a bullish transfer.

Long-Term Analysis: 

From a longer-term time-frame, I wrote up an extended evaluation on Trading View highlighting some new Fibonacci numbers that I had used for figuring out resistance and assist ranges for weekly/month-to-month evaluation.

Bitcoin hit the 17.944 Fibonacci Extension and has fallen all the way down to the 5.618 Fibonacci extension and is at the moment holding it as assist.

Canfield Fibonacci Sequence On Bitcoin

If you’re not accustomed to these increased Fibonacci numbers, it’s as a result of they’re comparatively new.

I lately created the ‘Canfield Fibonacci’ Numbers and started making use of them to monetary markets. I discovered that they’re pinpoint correct for long-term tendencies.

If you’d prefer to experiment with them, you possibly can calculate them utilizing the Fibonacci sequence and get the next:

Make positive you’re utilizing any quantity previous 13 within the sequence.

• 6.854 = Any quantity within the sequence / third quantity prior within the sequence
• 11.090 = 1.6185 = Any Number / 4th quantity prior within the sequence
• 17.944 = 1.6186 = Any Number / fifth quantity prior in within the sequence
• 29.034 = 1.6187 = Any quantity /sixth quantity prior within the sequence
• 46.979 = 1.6188 = Any quantity / seventh quantity prior within the sequence
• 76.013 = 1.6189 = Any quantity / eighth quantity prior within the sequence
• 122.992 = 1.61810 = Any quantity / ninth 2.88% quantity prior within the sequence.

Using these numbers, experiment with them on longer time-frame charts just like the Dow Jones, Amazon, Apple, S&P 500 and see what you possibly can give you. I’ve discovered that the 17.944 reveals up loads, and is identical Fibonacci extension that rejected each Gold and Bitcoin.

Everyone continues to be ready for an enormous transfer out of Bitcoin, however each time Bitcoin will get boring over the previous two years is once I flip to altcoins. Big strikes out of Bitcoin normally spell catastrophe for the altcoin market, so we prefer it when Bitcoin stays quiet for some time.

Trader Tip: When Bitcoin turns into vary certain and steady, it’s a good time to commerce alts.

Thanks for studying and in case you loved the article, ensure you click on the guts and depart a remark beneath.

I’ll remember to learn them and reply to as many as I can.

Disclaimer:  The views expressed on this article are the private opinion of the writer and don’t mirror the views of Bitcoinist. The info within the article shouldn’t be taken as monetary recommendation.]

To get future updates to when Jacob Canfield (I Love Crypto) writes new articles or to get involved straight with him, you possibly can comply with him on Twitter (@ILoveCrypt0)  Youtube, and TradingView.

What are your ideas on Bitcoin’s relationship with Fibonacci numbers? Don’t hesitate to tell us within the feedback beneath!


Images and media courtesy of TradingView (jacobcanfield), Shutterstock.





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