DAILY NEWSLETTER
Your daily dose of Crypto news, Prices & other updates..
Glossary
- Airdrop
- Altcoins
- Amicus Curiae
- Anti-money laundering (AML)
- Artificial Intelligence
- Assets Under Management
- Bear Market
- Bitcoin
- Bitcoin Cash(BCH)
- Black Swan Event
- Blockchain : An Explication of a Decade Old Technology!
- Blockchain 2.0
- Blockchain Wallet
- Breakout
- Bull Market
- Celsius
- Central Bank Digital Currency (CBDC)
- Centralized Cryptocurrency Exchanges (CEX)
- Chainlink (LINK)
- Circulating Supply
- Coinbase
- Cold Wallet
- Consumer Price Index (CPI)
- Cross-Chain Bridges : Meaning and How Do They Work?
- Crypto Buyback
- Crypto Exchange
- Crypto Mining
- Crypto Mixer
- Crypto Regulation:
- Crypto Tokens
- Crypto Wallets
- Crypto Winter
- Cryptocurrency Meaning : What is Cryptography ? How does Cryptocurrency Work ?
- Cryptography
- Dark Web
- Decentraland
- Decentralized Applications (DApps)
- Decentralized Exchange
- DeFi: Decentralized Finance
- Double Bottom pattern
- Double Top Pattern
- Double-Spending
- Encryption
- ERC-721
- Escrow
- Ethereum Merge : Understanding the Merge Made Easy !
- Federal Reserve System
- Fiat Money
- Fibonacci Retracement
- FOMO: Fear Of Missing Out
- FUD
- Genesis Block
- Hard Fork
- Hash rate
- HODL
- Howey Test
- ICO: Initial Coin Offering
- IEO
- Initial Dex Offerings (IDOs)
- IPO
- Justin Sun
- Mainnet
- Market capitalization
- Meme Cryptocurrency
- Merging
- Move-To-Earn (M2E)
- Multichain Blockchain: Meaning and How does It work?
- NFT: Non-Fungible Token
- Off-Chain Blockchain Analysis
- Parallel Channel Pattern
- Play-to-earn (P2E)
- Privacy Coins
- Private Key
- Proof of Reserves (PoR)
- Proof-of-stake (PoS)
- Proof-of-work: An In-Depth Explanation Of The Consensus Mechanism!
- Public Key
- Rounding Bottom Pattern
- RSI: Relative Strength Index
- Sandbox
- Sharding
- Short Squeeze
- Smart Contract
- STEPN
- Symmetrical Triangle Pattern
- Testnet
- Token
- Tokenization
- Tokenomics
- TVL: Total Value Locked
- USD Coin (USDC)
- UTXO – Unspent Transaction Output
- Wallet Address
- Wash Trading
- Web 3.0
- Wedge Pattern
- Whale Accumulation
- What Is Bitcoin Halving?
- What is Tax2Gas ?
- ZK-Rollup
A
B
C
D
E
F
G
H
I
J
M
N
O
P
R
S
T
U
W
Z
Fibonacci Retracement
What is Fibonacci Retracement?
Fibonacci retracement is derived from the natural series known as Fibonacci. The retracement levels indicate horizontal support and resistance levels. These levels indicate a probable reversal direction in the prices.
Fibonacci retracement is deployed at a certain percentage. This percentage tells how much the price has corrected and what would be the probable following price action.
When to use?
The indicator works best when the market is in a particular trend.
How to use it?
While analyzing a technical chart, a Fibonacci retracement is drawn near two extreme points, usually a high and a low. The division is between the vertical distances drawn as horizontal lines. The key ratios are 23.6%, 38.2%, 50%, 61.8%, and 100%.
Buy: when the price is near the horizontal level, initiate a long position when the market is in an uptrend.
Sell: when the price is near the horizontal level, initiate a sell position when the market is a downtrend.
The following chart illustrates how a Fibonacci retracement can be used in making highly probabilistic trading ideas.
Here we plotted the ratio by joining the swing low at and swing high of and dragging the cursor to the highs.
Here, the Ethereum price retraced from the recent high of $2,031.39, it found support at one of the Fibonacci retracements at 0.38%, later selling amplified toward 0.5%. As soon as the price tested the 0.5% level the traders found a bargain buying opportunity.
However, as with other technical tools, the Fibonacci retracement should be used along with other confirmations.
Trending
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Share on
SUBSCRIBE TO
4M+ Monthly Readers
80k+ Articles
©2025 CoinGape, All rights reserved