As bitcoin reached a new all time high of 7899$ in wake of Segwit2x being cancelled, money started flowing out of bitcoin as people wanted to get back into altcoins. This resulted in the beginning of a major correction, especially as Bitcoin Cash started getting hyped on social media by Jihan Wu and Roger Ver (The biggest proponents of big blocks on the bitcoin blockchain). The correction is currently ongoing so I wanted to take a moment to make a quick post to where I think the bottom will be, using historical data.
I find Fibonacci levels to be the most accurate in finding retracement levels and if we apply them to the bitcoin price, we will find some very interesting price levels. If you’ve read Ichi-Ryu’s Fibbonaci series you should know that 38.2%, 50% and 61.8% Fib levels are the most common ones that price touches the most.
Applying this to the bitcoin chart, we start to get a good idea of where the price should end up. Using Fib levels we should expect the price to bottom in a range of 4852-5432$.
As the timing of this writing the price has already gone down a bunch and we could have possibly hit a bottom already. In trading nothing is ever 100% certain and everything works in probabilities. Macro events such as the Mt Gox hack can also have catastrophic effects on the price.
However check this chart and you will see how we can use Fibonacci levels to get a good idea of where the price will go. Using Fibonacci with your analysis is imperative. It is a mandatory indicator that I always use.