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Trendbasedfib

ADA reversal when?Hey everyone, Here is a detailed analysis of Cardano . It has been in a downtrend since September first week. We might consider this downtrend as a correction if it takes support on the 0.786 level of Fibonacci . Let's get into the history of ADA and what happened in the past few weeks. ADA retraced from the golden zone of Fibonacci of the previous wave and went for a new high at 3.097 USDT . Since then, it is in the downtrend. It has made some chart patterns too. Let’s look into it. The Bearish Rectangle Formation The rectangle figure is a trading pattern which can appear during bullish and bearish trends. The pattern consists of tops and bottoms, which are parallel to one another. The other key point to illustrate is that the highs and lows are all horizontal. I have shown the figure of the bearish rectangle at the top of the chart. After recognizing the chart pattern, you have to wait for the breakout and pullback. The pullback candle should not close inside the rectangle. Once the pullback is done, you can see a massive downward movement. I have marked the pullback with a green eclipse. We can set 2 profit targets for this pattern. First can be equal to the height of the rectangle and second can be equal to the length of the trend above the rectangle. I have marked the profit targets with the price range arrows . Reversal When? According to the trend-based Fib Time reversal , the trend might reverse around 26 December, if everything goes right. You can comment down if you wan to learn how to make it. When to buy the dip? According to me, you shall consider these 2 prices for the same: 1.46 to 1.55: It is the 0.786 level on Fibonacci with a major support and resistance zone. 1.02 to 1.21: This Is the zone between the previous low and the 2nd target of the bearish rectangle. Does ADA have good fundamentals? Ofcourse! Cardano’s purpose is somewhat same as Bitcoin’s purpose, but it is slightly faster in making payments. It works on blockchain, and it operates in 2 layers. The current market cap is around $50B and it was once ranked 3rd in the total market cap, which has now decreased to 6th. The social media following and team behind the project is also good. Hope you like the idea. I might not be able to post the photos of analysis of different timeframes in the same idea, as I don’t have TradingView Premium. The reason for the same is that I’m a teenager and I’ve been trading the markets with the borrowed money from my parents. I can’t afford to buy the premium, hence I request TradingView to unlock some features for some traders like me. Do check my previous education idea on cup and handle chart pattern through the link given below.
Education
by theTAguy
Using the Trend-Based Fib Extension ToolThe Fibonacci ratios are widely used among traders to help identify potential areas of reversal in the movement of price action. The Trend-based Fibonacci Extension tool utilizes three points on a previously identified trend in order to draw the Fib ratios on the chart. In the chart above, price was rejected twice forming a double top which is a fairly strong reversal pattern. To help identify potential areas of support and resistance we have drawn a Trend-Based Fib Extension. Using the double top patterns High, Low, and High as the three points for the Trend-Based Fib Extension, the Fibonacci ratios are drawn on the chart. In this example, you can see that price action respected these levels very well until finding strong support at a potential bottom that corresponds with the 200% extension level. But, notice the region in the yellow box on this chart. There seems to be no identified areas where the Fibonacci ratios show support or resistance. While retrospectively we can tell that the area of support found at ~ $12 (141.4%) in mid-November 2017 did not produce a new bull market. At the time there was a potential reversal at that region resulting in higher highs and therefore we could have pulled a NEW Trend-Based Fib Extension as shown below. As the new Trend-Based Fib Extension is identifying areas of a new uptrend, we see that these ares are shown in a way that they were not in the previously drawn Trend-Based Fib Extension. However, price was rejected at the 61.8% level and continued downward until the 0% extension level was broken, thus invalidating this Trend-Based Fib Extension. While the upward price trend did not continue, there was a local high that was made and thus could be utilized to create another Trend-Based Fib Extension to further identify areas of reversal for the continuing downtrend as shown below. Looking at this newly created Trend-Based Fib Extension, we see that the areas moving down to the 78.6% extension level are very well respected, at which time the price found support, creating a triple bottom reversal pattern. It is interesting to note that the 78.6% extension on this Trend-Based Fib Extension pull is at $1.82, and the 200% extension level from our first Trend-Based Fib Extension pull was at $1.95, a mere $0.13 difference in price. This area where the two levels of a Trend-Based Fib Extension or Retracement group together is know as a Fib cluster and indicates areas of strong support or resistance. With price forming a triple bottom and reversing from this level, is it possible that this is the bottom of this downtrend? Could a new Trend-Based Fib Extension now be pulled from a new Low/High/Low to identify potential areas of support and resistance? Give it a try and see what you find!
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