Bitcoin approaches $20,000; how can we measure new areas?
Bitcoin is fast approaching the $20,000 region, so what tools can we possibly use to find the important areas once it breaks out?
There is not much price data at this point, so we can use the Fibonacci extension tool to give us potential areas the price can reach.
In this idea I am going to go over 3 potential tools we can use here on Bitcoin to gauge areas of Support & Resistance, and potential price targets. They are:
-Fibonacci Retracement Tool
-Support & Resistance Flip (Price Action)
-Ascending Triangle (Chart Pattern)
The fibonacci tool is basically a mathematical equation that gives us important areas marked as lines on the chart, it is common for the price to reach these areas before reversing in the other direction.
We drag the Fibonacci Retracement tool from different major swing high to swing low points, then double click on it to add our Extension levels.
Popular extension levels used are 1.272, 1.382 & 1.618, and popular Retracement levels are 0.382, 0.5 & 0.618.
We also have the key resistance area marked in red, if we can see a Support & Resistance flip here (when price repeatedly decreases in value from the same area it is referred to as "Resistance", when price increases in value repeatedly from the same area it can be referred to as "Support") the idea is that after many consecutive touches a Resistance area can be broken and then "flipped" into a Support area and the opposite for Support. These are referred to as Bullish (upwards) or Bearish (downwards) Support & Resistance Flips ( "S/R Flips" ).
So while Bitcoin is under 19900 region we have the possibility of a retracement since we are under a important resistance area BUT this is not a recommendation to SHORT, as in fast past up trending markets that is risky, more so just a caution as it is a significant area for sellers historically. If the sellers to win out here (which I think is unlikely) then the next possibility to watch for is the Ascending Triangle Pattern only if we have a 5th touch around the 18600 area.
Another way we can get potential areas the price can react to, is by using Chart Patterns (in this example i have chosen the Ascending Triangle - but the pattern is not actually on the chart yet so this is to be treated as a example).
The Ascending Triangle is identified by price making 5 swings between a Right Angled Triangle, while ascending (increasing in value after each consecutive downwards swing). This pattern can be a potential sign that the price can actually continue upwards, and requires 5 perfect touches within the pattern to be considered valid. Bitcoin is currently on 4 touches of this pattern (if we were to decrease in value now) so something to watch out for.
Meanwhile if we breakout above the Resistance area, the Fibonacci levels on the chart give us potential areas to consider taking profits.
So i hope this idea gave you some different tools and perspectives to use, and if you found the idea imformative you can show your appreciation by liking & commenting
Thank You Traders!
There is not much price data at this point, so we can use the Fibonacci extension tool to give us potential areas the price can reach.
In this idea I am going to go over 3 potential tools we can use here on Bitcoin to gauge areas of Support & Resistance, and potential price targets. They are:
-Fibonacci Retracement Tool
-Support & Resistance Flip (Price Action)
-Ascending Triangle (Chart Pattern)
The fibonacci tool is basically a mathematical equation that gives us important areas marked as lines on the chart, it is common for the price to reach these areas before reversing in the other direction.
We drag the Fibonacci Retracement tool from different major swing high to swing low points, then double click on it to add our Extension levels.
Popular extension levels used are 1.272, 1.382 & 1.618, and popular Retracement levels are 0.382, 0.5 & 0.618.
We also have the key resistance area marked in red, if we can see a Support & Resistance flip here (when price repeatedly decreases in value from the same area it is referred to as "Resistance", when price increases in value repeatedly from the same area it can be referred to as "Support") the idea is that after many consecutive touches a Resistance area can be broken and then "flipped" into a Support area and the opposite for Support. These are referred to as Bullish (upwards) or Bearish (downwards) Support & Resistance Flips ( "S/R Flips" ).
So while Bitcoin is under 19900 region we have the possibility of a retracement since we are under a important resistance area BUT this is not a recommendation to SHORT, as in fast past up trending markets that is risky, more so just a caution as it is a significant area for sellers historically. If the sellers to win out here (which I think is unlikely) then the next possibility to watch for is the Ascending Triangle Pattern only if we have a 5th touch around the 18600 area.
Another way we can get potential areas the price can react to, is by using Chart Patterns (in this example i have chosen the Ascending Triangle - but the pattern is not actually on the chart yet so this is to be treated as a example).
The Ascending Triangle is identified by price making 5 swings between a Right Angled Triangle, while ascending (increasing in value after each consecutive downwards swing). This pattern can be a potential sign that the price can actually continue upwards, and requires 5 perfect touches within the pattern to be considered valid. Bitcoin is currently on 4 touches of this pattern (if we were to decrease in value now) so something to watch out for.
Meanwhile if we breakout above the Resistance area, the Fibonacci levels on the chart give us potential areas to consider taking profits.
So i hope this idea gave you some different tools and perspectives to use, and if you found the idea imformative you can show your appreciation by liking & commenting
Thank You Traders!
The first target area for me is 20900.