How to Trade with Fibonacci Retracement in Crypto


Alternatively, you can use the Alt+F shortcut to activate the Fibonacci retracement levels indicator if you are using our web app. If you are still wondering how to place Fibonacci retracement you are in for a treat. Drawing Fibonacci retracement levels is completely streamlined in our GoodCrypto app. The only thing you need to learn through trial and error is where to place Fibonacci retracement, as there is no particular rule on how to draw Fibonacci retracement correctly. Selecting a relevant high and low price should be your starting point, depending on the timeframe that you are trading on.

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 but rather use the levels to determine when to secure their profit.

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Our low point reference will be the low levels of September 2021 and January 2022 at $39,470. Simply click and drag LINK from the all-time high to the lowest points to draw the Fibonacci retracement table. Once in fullscreen, you can proceed to draw your Fibonacci retracement by using the integrated Fibonacci retracement lines tool. To access this Fibonacci retracement charting tool, activate the drawing tools by clicking on the icon with a square and a cross in the middle.

Conversely, when drawing the Fibonacci retracement on downtrend, attach the tool to the top and drag it to the bottom of the trend. 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. Many crypto traders use the Fibonacci retracement tool to check for possible places where a price pullback may find support or resistance.

The Sequence and Ratios

But before the bull market truly takes off, the next logical level, according to one crypto analyst, is right below $25,000 at $24,800. Sign up for Crypto for Advisors, our weekly newsletter defining crypto, digital assets and the future of finance. As you can see, the retracements of 0.236, 0.382, 0.5, 0.618, 0.786 were all respected as support, at least temporarily, as price rebounded from its September plunge.

It often acts as a strong /resistance within the trend and you should use this Fibonacci retracement level liberally. The aforementioned ratios of 68.1%, 38.2%, and 23.6% form horizontal lines between these points, with two additional levels, at 50% and 76.4%. These crypto Fibonacci lines provide price levels where the price is likely to reverse within the trend. They also provide levels where the price is more likely to stall and encounter support or resistance. When working with Fibonacci levels, candlestick patterns and trend lines might be helpful. If the price of an asset is getting close to a retracement level, you should look for a candlestick pattern to confirm a resumption of the new bull trend.

Find The Best Price to Buy/Sell Cryptocurrency

Price tends to come back to these levels before continuing the predominant trend. Fibonacci extension levels indicate levels that the price could reach after an initial swing and retracement. TradingView has a smart drawing tool for Fibonacci retracements and one for Fibonacci extensions that allow users to visually identify these levels on a chart. Both tools are fully customizable and levels can be changed or added. When you think of popular cryptocurrency trading tools, the Fibonacci retracement level tool is right there at the top of the list. Helping traders reveal key levels to place buy and sell orders is a very simple way to explain the purpose of this highly effective tool and doesn’t entirely do it justice.

You will be able to construct your own Fibonacci retracement day trading strategies and place market entries and exits. But before we delve deeper into practices GALA of trading Fibonacci, let’s begin with a short introduction on what is Fibonacci retracement and how it was discovered. To this end, we will explain the meaning behind Fibonacci retracement numbers. Additionally, we will show you how to draw crypto Fibonacci retracement using our free Fibonacci retracement tool.

A bitcoin fibonacci levels today high is simply a candlestick at the peak of a trend in any time frame that has a lower high directly to its right and left. Conversely, a swing low is the low candlestick stick of a trend with a higher low on each side. First, let’s define what this so-called “Fibonacci” is so you have a better idea as to why it is a concept relevant to trading cryptocurrencies. The Relative Strength Index can also be used to confirm sell signals in the same manner. In the example below, the same Fib level generated a sell signal when the RSI became oversold and then fell back below 70.

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Thefirst disadvantage is that this isn’t objective, which means that it works well only for some assets. For Fibonacci retracement to work in the market’s favor, a significant amount of traders have to use the same Fib ratios, which will then reflect in the price momentum of the asset as well. 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. They use the combination to make low-risk entries into an ongoing trend and form a confluence that helps make better trading decisions.

Fibonacci Retracement Bitcoin & Crypto Trading Strategy: The Magic Numbers

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. My Barchart members have the option to export the data to an Excel spreadsheet or as a .csv file.


Traders and financial experts apply the Fibonacci sequence in several ways to try and predict how the market will move, each approach having a different outcome and success rate. Chart 3 shows Target with a correction that retraced 38% of the prior advance. This decline also formed a falling wedge, which is typical for corrective moves. Chaikin Money Flow turned positive as the stock surged in late June, but this first reversal attempt failed. Notice that TGT gapped up, broke the wedge trend line and Chaikin Money Flow turned positive .

To learn how to use the Fibonacci retracement tool, you need to understand how to read the lines provided by the aforementioned Fibonacci crypto ratios. In the 12th century, Leonardo Pisano , noticed that this sequence is widespread across nature. It can be naturally found in spiral shapes that form seashells, constellations, flowers, etc. More importantly, it is believed that Fibonacci retracement also affects how humans behave.

  • Chart 4 shows Petsmart with a moderate 38% retracement and other signals coming together.
  • Yet, before that occurs, the asset’s price normally retraces to one of the above-mentioned ratios.
  • The price reaching below 0.382 ($51,463) could be a signal that the downtrend continues.
  • The top cryptocurrency touched the golden ratio target at the 2021 peak when Fibonacci extensions are drawn from the very open of the BTC CME chart to the 2018 bear market bottom.
  • Here at NewsBTC, we are dedicated to enlightening everyone about bitcoin and other cryptocurrencies.

The pivot point and its support and resistance pairs are defined as follows, where H, L, C are the current day’s high, low and close, respectively. Support and Resistance points are based on end-of-day prices and are intended for thecurrent trading sessionif the market is open,or thenext trading sessionif the market is closed. Fibonacci retracement is based on the sequence of hidden levels within the horizontal lines of support and resistance at which crypto prices have a chance of turning around.


Prior to this successful bounce, there was a failed bounce near the 50% retracement. The successful reversal occurred with a hammer on high volume and followed through with a breakout a few days later. Finding Fibonacci retracement resistance works the same way, but by drawing from the top of a completed trend to the following trough. Resistance lines will be drawn at each key Fibonacci retracement level. 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.

The Fibonacci ratios are calculated simply by dividing the numbers in the Fibonacci sequence. For example, the ratio of 61.8% is calculated by dividing 21 by 34 or dividing 55 by 89. 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. This level has previously served as a barrier, and it is likely to maintain BTC’s bullish trend.

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The percentage levels provided are areas where the price could stall or reverse. ETH/BTC is a popular cryptocurrency trading pair that denominates the price of Ethereum in Bitcoin. A method in which investors put their money in two extremes of high-risk and no-risk assets while ignoring … Developed by Leonardo Fibonacci in 1170 AD, Fibonacci ratios represent a set of key numbers created by considering two extreme points of the ratios.

How do you apply Fibonacci retracement levels in a chart?

As one of the most common technical trading strategies, a trader could use a Fibonacci retracement level to indicate where they would enter a trade. For instance, a trader notices that after significant momentum, a stock has declined 38.2%. As the stock begins to face an upward trend, they decide to enter the trade. Because the stock reached a Fibonacci level, it is deemed a good time to buy, with the trader speculating that the stock will then retrace, or recover, its recent losses.

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