What is Fibonacci and how to use it in cryptocurrency trading? 📊

The crypto market may seem chaotic, but behind the price, there are patterns that repeat. One of the most used by technical traders is Fibonacci, a tool based on natural proportions that helps you detect:

• Key retracement zones

• Possible price bounces

• Strategic points to enter or exit a trade

What is Fibonacci in trading?

It is an indicator that plots horizontal levels on a chart, based on percentages derived from the Fibonacci sequence. The most commonly used levels are:

• 23.6%

• 38.2%

• 50%

• 61.8% (the famous “golden level”)

• 78.6%

It is drawn from a low point to a high point (in an uptrend) or from the high point to the low (in a downtrend).

Practical example with $XRP:

Let's assume that $XRP rises from $2.00 to $2.50

Using Fibonacci, you can anticipate where the price might correct if it retraces.

Key retracements:

• 23.6% = $2.38

• 38.2% = $2.31

• 50% = $2.25

• 61.8% = $2.19 (golden zone)

• 78.6% = $2.11

If the price starts to drop, many traders will look to buy at $2.19, hoping for a bounce from that natural support.

What is Fibonacci used for in your strategy?

• Detecting areas to buy with a bounce

• Placing stops below key levels

• Marking targets in trend extensions

• Complementing with other indicators (RSI, volume, EMA)

Does it work in the crypto world?

Yes!

The high volatility of the crypto market often makes Fibonacci retracements work, as traders' emotional behavior tends to repeat.

Fibonacci is not magic, but it is a powerful tool for understanding how price moves and anticipating with more clarity.

Do you already use Fibonacci in your technical analysis? Would you like a step-by-step guide to apply it on Binance or TradingView?

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