Analysis provided by Ashton Fraser, learn more about his trading strategies with the forex reversal indicator.
This morning Bitcoin retests the low from the weekend, giving some credence to 555 as a support level, for more than one reason.
Let's take a closer look at the BTC/USD hourly chart below (click to expand):
I've performed the Fibonacci study from last week's high at 605 to the low of the past fortnight at 555.
It's interesting to note that this low has been tested a number of times in the space of a couple of days (marked in blue).
One of the reasons for this, is that 555 is actually a previous Fibonacci support / resistance level. To realise this, we need to zoom out to the H4 timeframe, see below:
So, when performing the Fib study on H4 for the major swing points from the last week of February (marked in red circles), in this case from a high of 630 to a low of 430, then we'll realise that 555 equates to the 61.8% Fib level. Now, even though that swing high of 630 has of course been passed since, often previous Fibonacci levels continue to apply. A lot of traders can miss this, but they're absolutely valid, especially if the swing points were sharp turning points, which in this case they were.
Going back to our initial H1 chart, we can see how, right now, price is at the 23.6% Fib level. If price manages to close above this level, we may see a rise to 38.2% at 575 later today.
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