Bitcoin : The fibonacci rules of thumb

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
Bitcoin has shown an impairment of its value with today's drop from the high of $9300 region to the low of $8620. Based on the daily perspective, the price however is trending above the .236 fibonacci retracement level. Is this a strong support?

A lot of traders may assume that the .236 fibonacci retracement is not a significant level based on the fibonacci rules of thumb. The most significant levels that I personally use is the .382 , golden ratio and the .786 . But, I do believe that there is a confluence factors that can make this support as a strong support as well. Based on this chart applied, you can see at least 2 confluence factors that can give us a new parameter and consider this as a strong support. The first factor is it moves align with the support trend line that has held the price since March 2020 and the 2nd factor is this horizontal line was becoming a strong support back at the period between January 14th - March 7th which the price formed a Head and Shoulder pattern which was a crucial pattern that is still related with today's movement.

However, I'll look at this crucial level of support for now. If the price can breaks of this strong support, I'll expect a drop toward the next fibonacci level which is the .382 , golden ratio and the .786 level. You can see the blue region as my crucial level of support to watch or the target of short term drop if I can catch the short when the price breaks down of this white support trend line .


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