Fibonacci Retracement

The Fibonacci ratios are a set of critically important mathematical constants in the Universe, these ratios are even found inside our own bodies and our own DNA as shown in the title image for this article. It is therefore no surprise that these ratios are also of critical importance to Financial Markets. The Fibonacci Retracement is a powerful tool for navigating price action and finding optimal trade entries & exits. It can also be used to find repeating patterns that occur over various periods of time. I’ve included a long time period example from Bitcoin below. In this chart we can see that the crucial 61.8% fib level is acting as strong resistance for Bitcoin on higher time frames. If Bitcoin were to rally from a Major Low and break & hold above the 61.8% Fib level this would tell us that probabilities have shifted in favor of the bulls and we should now draw up higher targets on our charts.