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The Golden Ratio Multiplier - by Philip SwiftBy Philip Swift Disclaimer: Nothing contained in this article should be considered as investment or trading advice. As Bitcoin continues to progress on its adoption journey, we learn more about its growth trajectory. Rather than Bitcoin price action behaving like a traditional stock market share price, we see it act more like a technology being adopted at an exponential rate. This is because Bitcoin is a network being adopted by society, and because it is decentralised money with limited supply, its price is a direct representation of that adoption process. There are a number of regression analysis tools and stock to flow ratio studies that are helping us to understand the direction of Bitcoin’s adoption curve. The new tool outlined in this paper brings an alternative degree of precision to understanding Bitcoin’s price action over time. It will demonstrate that Bitcoin’s adoption is not only following a broad growth curve but appears to be following established mathematical structures. In doing so, it also: Accurately and consistently highlights intracycle highs and lows for Bitcoin’s price. Picks out every market cycle top in Bitcoin’s history. Forecasts when Bitcoin will top out in the coming market cycle. To begin, we will use the 350 day moving average of Bitcoin’s price. It has historically been an important moving average because once price moves above it, a new bull run begins. miro.medium.com The new insight comes when we multiply the 350 day moving average (which we will refer to as the 350DMA) by specific numbers. Those mathematically important numbers are: The Golden Ratio = 1.61803398875 Fibonacci Sequence = 1, 1, 2, 3, 5, 8, 13, 21… You can use these hyperlinks if you need a refresher on the importance of the golden ratio or Fibonacci sequence in nature and mathematics. But we see them consistently throughout life whether it is in the pattern of how plants grow, the structure of hurricanes, or even trader behaviour in financial markets. Building the cyclical layers We will start with the Golden Ratio of 1.6 (rounded here to one decimal place). If we take the 350DMA (orange line) and multiply its value by 1.6, we create a new line above it, the 350MA x 1.6 (green line). We then discover in the chart below how this newly created green line has in fact acted as support and resistance throughout Bitcoin’s history, examples of which are highlighted by the arrows on the chart: miro.medium.com It is also worth noting that the 350DMA x 1.6 line acted as resistance in the parabolic price move from the Dec 2018 low. Rejecting price perfectly on the first touch and causing a $1,500 pullback before approaching it again and likely breaking through at the time of writing: miro.medium.com Things become more interesting when we then start to multiply the 350DMA by each number in the Fibonacci sequence: 1, 2, 3, 5, 8, 13, 21, etc. Given that multiplying the 350DMA by 1 would not change its value, we start with the next number in the sequence, which is 2. So we multiply the 350DMA by x2. Which is the red line in the chart below: miro.medium.com Again, the arrows highlight examples of where we see it act as a major level of support and resistance throughout Bitcoin’s history. As a trader or investor this, as well as the other multipliers, makes a potentially very useful short term take profit signal when price first reaches it. The next number in the Fibonacci sequence is 3. So now we multiply the 350 day moving average by 3. 350DMA x 3 is the purple line in the chart below. We see it acted as particularly strong resistance towards the upper stage of the 2017 bull market, with price unable to break above it on 5 separate occasions: miro.medium.com Using those three moving average lines (350DMA x 1.6, x2, x3) has allowed us to pick out almost every single intra-cycle price high in Bitcoin’s history. The next numbers in the Fibonacci sequence are 5, 8, 13, and 21. Remarkably, when we use these multiples of the 350 day moving average, they pick out each of Bitcoin’s market cycle tops going all the way back to the first price bubble in 2011. They are shown as dotted lines here: miro.medium.com 350DMA x21 = 2011 top 350DMA x13 = 2013 top 350DMA x 8 = 2014 top 350DMA x5 = 2018 top Practical application As with any indicator, the Golden Ratio Multiplier should not be used in isolation, but it does offer a risk management opportunity. Using the previous cycle as an example, if one had bought the breakout at the 350DMA and then taken profit the first time price reached the x1.6, the x2, and the x3, buying back lower each time, that would have been a very successful investment strategy. One could then have sold the top of the market as price touched the 350DMA x5. If Bitcoin’s market cycle tops continue to follow this declining Fibonacci sequence, then the next market cycle top will be when price hits the 350DMA x3 (purple line). Why does price obey these levels? We know that Bitcoin goes through multi-year market cycles which are driven by over-optimism and over-pessimism. The 350DMA appears to be particularly relevant to those market cycles as to date it has been the axis that the cycles have rotated on. Given that market psychology (of over-optimism and over-pessimism) is a major factor driving these market cycles, it is plausible that part of the reason why Fibonacci multiples of the 350DMA are so important is due to how herd mentality responds to price action: In many cases, it is believed that humans subconsciously seek out the golden ratio. For example, traders aren’t psychologically comfortable with excessively long trends. Chart analysis has a lot in common with nature, where things that are based on the golden section are beautiful and shapely and things that don’t contain it look ugly and seem suspicious and unnatural. This helps to explain why, when the distance from the golden section becomes excessively long, the feeling of an improperly long trend arises. Understanding Fibonacci Numbers. Dima Vonko, Investopedia, 2019 Whatever the reason, the tool highlights the cyclical nature of Bitcoin adoption and the flattening of its growth trajectory on a log scale. Bonus: picking market cycle tops to within 3 days Using the x2 multiple of the 350 day moving average along with the 111 day moving average provides us with a different market cycle indicator. When the 350DMA x2 crosses below the 111DMA, Bitcoin price peaks in its market cycle. Over the past three market cycles, this has been accurate to within three days of Bitcoin price topping out: miro.medium.com This will be something worth monitoring in the latter stages of the coming bull run. It is also of interest to note what 350 / 111 equals: 350 / 111 = 3.153 Which is very close to Pi. Pi = 3.142 It is, in fact, the closest we can get to Pi when dividing 350 by another whole number. Conclusion The Golden Ratio Multiplier will be a useful investment tool in this coming market cycle for identifying areas of take-profit as price approaches the multiplier levels of 350DMA x1.6, x2, and x3. Assuming the Fibonacci sequence countdown continues to play out, the 350DMA x3 will signal the top of this coming market cycle. The tool can also signal market tops when used alongside the 111DMA. But arguably more powerful than these investment and trading benefits is the ability to demonstrate how Bitcoins adoption, and therefore our herd behaviour as humans, is following mathematical structures. Via its price action, Bitcoin is offering us the opportunity to view free market adoption in real time, revealing how humans adopt at scale. Which is a beautifully humbling phenomenon to observe. Thanks to Willy Woo for his assistance with the Golden Ratio chart layout aesthetic. To use the live chart of the Golden Ratio Multiplier follow me on Twitter where there is a link to it in my bio. It is free to use and doesn’t require sharing any personal data. I’ll be sharing more tools via Twitter in the coming months. All rights reserved Philip Swift Article Link > HERE
BNC:BLX
by ferGOD
1
Descending Triangle BreakdownIt may happen tomorrow or it may string us along until the end of the year but it would seem this descending triangle has the potential to drop back down to support from LAST YEAR'S descending triangle. If this takes as long as before and we end up consolidating well into it's apex that would give time for the 200 week MA to move up and create strong support again as well (just like last year). This also makes sense with the Fib retrace because dropping to last years support would put us in the "golden pocket" between the 61.8% and 65% lines. I drew the fib using monthly candles which is why it falls a little short from the top of the triangle, but considering how volatile price action was around that top, I feel it's a good spot. I am short until we reach the buy zone between 8500 and 5000 (I doubt it will fall past 6400 & 6000 though). Then I will gradually transition long for the inevitable run back up as we approach the halving next year.
BNC:BLXShort
by galamity
2
USD/JPY Multi-TimeFrame Analysis Monthly: Huge rejection of 112 level with two spinning tops and a huge bearish engulfing candlestick Weekly: Break & retest of 108.5 zone with a nice shooting star rejection candlestick Daily: Bulls failed to take controll of the market by breaking the ascending trendline. Bearn are now on controll 4Hour: We have a descending channel. Price retraced to our minor zone and fib 61.8 and also correlates with our 50 EMA Waiting for price action to pull the trigger #tradesafe
Short
by theforexdaddy
1
How To Predict Bitcoin Using The Golden Ratio!From looking at bitcoin’s previous cycles and using the golden ratio multiplier of the 350 DMA, I believe we won’t reach $20k for at least another 6-8 months. We need to be more realistic when it comes to timing all time high’s in price. The golden ratio doesn’t lie and this method I am showing has worked for the past decade perfectly for calling market cycle tops and medium term price swings. First, take a look at everything i’ve marked on the chart from all the previous cycles starting in 2012 and you will see the top of each market cycle touches the 350 DMA multiples of the golden ratio. Starting in 2013 we touched the 350 DMA x 13 2014 we then went down to the next DMA golden ration multiple of x 8... then 2017 we touched the 350 DMA x 5 (Blue). This leads me to believe this next market cycle will have to top off at the purple line which is the next golden ratio multiple of x3. This makes perfect sense as I believe each market cycle will take longer and longer as the market becomes bigger and more mature. From my previous post, I pointed out that we are due for a correction down to the 350 DMA x 1.618 and then later the 111 DMA (Gold Line). I’m still firm on this situation happening over the next few months because we are just way too high in price right now and the Daily Moving Averages need to catch up. All the DMA’s are in a steep uptrend and we want to see that purple line (350 DMA x 3) rise as high as possible because that will be the market cycle top! From looking at when these DMA’s cross you can tell when the price will begin rising dramatically and you can also tell when the bull run is as it’s peak! How? Well, historically whenever the gold line crosses the blue line the price goes to new heights rapidly. Then whenever the gold and the green lines have crossed we have reached a market cycle top! Look at all of the previous cycles on my chart as i’ve marked each time this has played out perfectly! Why does this work so perfectly? I don’t truly know. The only explanation I have is that it’s just the nature of consciousness. The market of bitcoin is a growing collective of consciousness, the more people entering this market the more accurate it becomes and the more the golden ratio will likely apply. You can use it in other financial markets but I feel it applies best here since there’s not as many factors besides speculation right now in bitcoin. The golden ratio can be seen everywhere in nature, like a snail shell, patterns on plants, the galaxies in space, and I believe psychologically it applies too. Consciousness is constantly only trying to understand itself, and that’s all life is really trying to do, and it just mysteriously plays out it the golden ratio 1.618034. Thanks for tuning in, I hope this gives you more clarity in this market :) IG: smack
BITSTAMP:BTCUSD
by UnknownUnicorn3766100
2
Lite the Way - LITECOIN! (LTC)Hello Traders! Litecoin continues to, of course, follow the bullish trail blazed by King Bitcoin. In our last analysis, we looked for two targets - $114 and $135. Our first target, has been hit :) Now, after the first smaller impulse wave on the 4h, we had a nice pretty 62% retracement. Most frequently, the 127% extension is the safest target for any retracement based trade. We have reached that. The reason that, I am posting a new chart here instead of updating the old one, is because I want to be able to retroactively view how we do react to the Fib Resistance Fan. So, now LTC is at the 0.618 resistance going by the fib tool. When BTC broke this level, there was a retest of it, as support, and we then got ANOTHER $1400 move up. At the time, that was about a 20% move. If LTC has a similar reaction to a breakout, we can expect this to push us straight towards our second target $135. Alternatively, if LTC DOES retrace here, I have placed a likely zone to look for more long opportunities. The yellow box there, is the 62% - 79% retrace zone for the CURRENT impulse wave. Just something to keep in mind, if we do start to retrace here. There are MANY targets much higher, of course, but with these analyses I am just focusing on the information swing traders are looking for. I will keep this analysis short, because truly, anything I have to say about what's going on lately, has been said in my Bitcoin analysis. Good luck traders! Previous Analyses:
COINBASE:LTCUSDLong
by vox-populi