Bitcoin Price and Ethereum to Gain Support at 38 2% Fibonacci Level; Litecoin Jumps 23%

Another important number usually used in Fibonacci retracement is 0.50, or 50%. It is not derived from the Fibonacci numbers, but it has been seen as an important point for likely reversal based on other theories. Everyone is still waiting for a big move out of Bitcoin, but every time Bitcoin gets boring over the past two years is when I turn to altcoins.

These levels are inflection points where some type of price action is expected, either a reversal or a break. Fibonacci retracements can be used to place entry orders, determine stop-loss levels, or set price targets. Since the bounce occurred at a Fibonacci level during an uptrend, the trader decides to buy.

Though many find it confusing, it can be very profitable if used correctly in the right scenario. Litecoin was rejected below the $83.65 resistance level on the technical front, and candle closings below this level triggered a bearish correction. ETH is currently testing the 50-day moving average line at $1,175 and a bearish crossover below this level could lead to a 38.2% Fib level of $1,160. The overall volume in DeFi was $3.21 billion, accounting for 6% of the total 24-hour volume in the crypto market. The overall volume of all stablecoins was $44.98 billion, accounting for over 93% of the entire 24-hour volume of the crypto market.

Applying Fibonacci Retracement to Your Crypto Trades

CoinMarketCap is currently ranked 13th, with a live market cap of $5.5 billion. 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. This means that the moving averages are in full bearish alignment. The three major moving averages used are the 50,100 and 200-day.

The inverse applies to a bounce or corrective advance after a decline. Once a bounce begins, chartists can identify specific Fibonacci retracement levels for monitoring. As the correction approaches these retracements, chartists should become more alert for a potential bearish reversal.

As mentioned earlier, when trading downtrend or uptrend Fibonacci retracement, the levels will provide you with crucial support and resistance levels. However, to draw the Fibonacci retracement in uptrend, you will need to attach the tool to the bottom and drag it up to the top. Conversely, when drawing the Fibonacci retracement on downtrend, attach the tool to the top and drag it to the bottom of the trend. This will allow you to place the most common Fibonacci retracement levels, including the extremely popular 50 Fibonacci retracement level. While this level isn’t obtained by calculating the ratios as we explained earlier in the article, setting a Fibonacci retracement level at the 0.5 level can be very useful.

Bitcoin price technical analysis shows that traders waiting to get back into the ongoing uptrend have a good opportunity this week. Bitcoin’s price has continued to rise beyond the $50,000 resistance level. However, the price could not break over the $52,000 resistance level. A high near $51,955 was achieved, and the price is presently reversing gains.

How to use Fibonacci levels in trading? Importance of Fibonacci levels

The current Bitcoin price is $16,418 and the 24-hour trading volume is $24 billion. During the last 24 hours, the BTC/USD pair has dropped nearly 1.5%, while CoinMarketCap currently ranks first with a live market cap of $346 billion, down from $350 billion yesterday. It has a total supply of 21,000,000 BTC coins and a circulating supply of 19,216,412 BTC coins. Cryptocurrencies have been trading sideways for some weeks, prompting some traders to consider alternatives with greater short-term promise. The following are some of the market’s leading presales, allowing investors to get in on the first floor. The global crypto market worth decreased 1.18% to $850.21 billion in the previous day, as major cryptocurrencies plummeted early on December 16.

• Receive live alerts on sudden market swings and upcoming DeFi projects.
• The material provided on this website is for information purposes only and should not be understood as an investment advice.
• Conversely, you must connect it to the last trend’s highest and lowest relevant prices in a downtrend.
• Eventually, the crypto will need to retrace to print a higher low, which would then confirm a new uptrend.

In the above example, (ETH/BTC) the golden pocket acted as a strong support zone for a bullish reversal from a 0.5 Fib retracement. In the example below, however, it acted as a support level in the downtrend. Once broken downwards, the golden pocket became a new resistance zone. Finally, we get to the meat of our article, where we teach you about Fibonacci trading strategy.

Bitcoin is Back Into Early Bull Market Territory: Glassnode

Developed by Leonardo Fibonacci in 1170 AD, Fibonacci ratios represent a set of key numbers created by considering two extreme points of the ratios. In other words, in an uptrend, you should draw the Fibonacci line from the low of the last relevant swing to its high. As seen on the chart above, Bitcoin has also been finding support on each of the Fibonacci levels as it grinds it’s way upwards and currently sits on the .382 support. The diagonal downtrend that we’ve been watching on the daily was finally broken and retested, which is the point of entry for a good break out trade. After Bitcoin broke out above the trendline, we waited for a long entry on the pullback. We also waited for a retest of the previous resistance in hopes that it would turn into support, which it did as you can see below.

The Fibonacci retracement method uses a set of key numbers called Fibonacci ratios to identify the support and resistance levels of an asset/stock/cryptocurrency. It’s worth noting that the 0.618 ratio is particularly important for trading with Fibonacci retracements. It is called the “golden ratio” and traders often consider it as a major trend support/resistance level. When the price reaches one of these levels, we expect that either a trend continuation or reversal will occur. While pivot points are best regarded as price zones and moving averages change with price action, Fibonacci retracement levels are fixed prices based on the price points.

In contrast, extensions show where the price could go in the direction of the trend after a retracement. When you apply the Fibonacci retracement to a price chart, you pick two price points – a high and a low. We can effectively calculate the Fibonacci levels based on the chosen points.

A bounce is expected to retrace a portion of the prior decline, while a correction is expected to retrace a portion of the prior advance. Once a pullback starts, chartists can identify specific Fibonacci retracement levels for monitoring. As the correction approaches these retracements, chartists should become more alert for a potential bullish reversal. Chart 1 shows Home Depot retracing around 50% of its prior advance. Fibonacci Retracements are ratios used to identify potential reversal levels. Note that 38.2% is often rounded to 38% and 61.8 is rounded to 62%.

Bitcoin medium-term price trend

When it doesn’t work out, it can always be claimed that the trader should have been looking at another Fibonacci retracement level instead. Technical traders may recognize today’s low and tentative support at $41,800. You have to look back to January 2021, when this price level was relevant.

The information provided by StockCharts.com, Inc. is not investment advice. Now, let’s take a look at some examples of how to apply Fibonacci retracement levels to the currency markets. Following the recent price drops, BTC plummeted below $50,000 as the leading cryptocurrency sank by $16,000 in a matter of hours to a 2-month low of $42,000. As the cryptocurrency regains $50,000, the crypto market cap recovers $200 billion in a single day. Meanwhile, Craig Wright, an Australian computer scientist who claims to be bitcoin’s inventor, has won a multibillion-dollar legal battle in the United States.

You only need to choose low and high price swings relevant to your analysis and the price at which you are trading. One of the notable things in the sequence is the ratio between the numbers. Each number is approximately 1.618 times bigger than the preceding number. The term “golden ratio” is not only based on the sequence’s derivation but also because the ratio reflects in almost everything around us.

You can also use the Fibonacci retracement tool with other technical indicators, including candlestick patterns, oscillators, volume momentum, moving averages, etc. Some people use it with price action to trade trend reversals and counter-trend trading strategies. These traders do not wait for the price to get to the Fibonacci retracement support or resistance bitcoin fibonacci levels today but rather use the levels to determine when to secure their profit. Some other people also regard the Fibonacci retracement tool as confusing and a waste of time and prefer not to use it. Fibonacci retracement is an important technical analysis crypto trading tool that gives insight into when to execute and close trades or place orders and limits.

Chart 5 shows JP Morgan topping near the 62% retracement level. The surge to the 62% retracement was quite strong, but resistance suddenly appeared with a reversal confirmation coming from MACD https://www.beaxy.com/ . The red candlestick and gap down affirmed resistance near the 62% retracement. There was a two-day bounce back above 44.5, but this bounce quickly failed as MACD moved below its signal line .

• The following are some of the market’s leading presales, allowing investors to get in on the first floor.
• On smaller time frames, Bitcoin may be forming a bull flag pattern under resistance in order to gather the strength to break higher.
• Because Fibonacci provides fixed lines for support and resistance, you can use Fibonacci sequence trading automation strategies.

In the example above, you can see how the Fibonacci sequence Bitcoin chart, where it allows you to take profits from price swings. Breakouts provide buy signals, where the target is the next Fibonacci retracement level. On the other hand, breaking down from Fibonacci sequence levels provides either short entries, or allows you to place stop losses in case of a fakeout.

A bullish breakout of the $16,785 level, on the other hand, could expose BTC to the $17,000 or $17,550 level. BinaryX , Huobi Token , and Stacks are three of the top 100 coins that have gained value in the last 24 hours. The BNX price has soared by more than 7% to $169, the HT price has grown by more than 5% to $5.65, and the STX price has increased by nearly 1.5%.

For example, if a stock price rises to $10 and then drops $6.18, it is said to have retraced 61.8%, a Fibonacci number. Although 0.500 or 50% and 1.000 or 100% are not exactly Fibonacci numbers, traders use them as a support and resistance indicator. The Fibonacci levels traders use in technical analysis are the Fibonacci retracements and extension levels. Thefirst disadvantage is that this indicator isn’t objective, which means that it works well only GAL for some assets. Many traders use the Fibonacci retracement levels in combination with the trend line and other technical indicators as a part of their trend trading strategy.