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The 78.6% Fibonacci Retracement

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The 78.6% Fibonacci retracement is an underused method for determining hidden support in crypto markets.

While you may be aware of the more popular 38.2%, 50% and 61.8% levels, you probably aren’t paying as much attention to the 78.6% Fibonacci retracement.

The 78.6% Fib level is a key level used by hedge funds, major investment banks and position traders.

As a result, day traders like you and I can take advantage, riding on the coattails of this smart money.

Let’s go over what is Fibonacci, why the 78.6% is significant and see a real world example playing out right now on HIVE.

What is Fibonacci again?

Fibonacci retracement levels are based on the key numbers identified by the famous Italian mathematician, Leonardo Fibonacci back in the 1200s.

The key to Fibonacci levels isn’t the sequence itself, but the ratios between numbers in each series.

This is why in forex and crypto trading, a high and low price point on a chart is taken, with the length divided into a set of key Fibonacci ratios.

These ratios being:

  • 23.6%
  • 38.2%
  • 50%
  • 61.8%
  • 78.6%

Once the prices at these levels have been identified, technical traders then watch them as possible areas of support and resistance.

Why is the 78.6% Fibonacci retracement significant?

While it doesn’t get the same attention from retail traders as the 50 or 61.8% levels, the 78.6% Fibonacci retracement level is watched closely by large position traders.

As the 78.6% retracement is so deep, hedge funds and banks use this level in conjunction with their own long-term fundamental analysis to identify value prices to take a position.

If their fundamental analysis says a market is a buy but it’s this heavily oversold, then the 78.6% retracement is where buyers will likely step in.

Just like other Fib retracements and areas of support/resistance, this becomes a sort of self-fulfilling prophecy that works simply because others think it works.

While the 78.6% level is significant, the fact it's such a deep retracement means you should never use it on its own.

Without any sort of supporting fundamental analysis to say what you’re buying is actually undervalued, what you’re likely doing is simply buying a dud.

Always use deep Fib retracements in conjunction with fundamental analysis and where possible, a further confluence of technical zones.

HIVE retraces to the 78.6% Fibonacci Retracement

With that word of warning in mind, bring up a fundamentally strong HIVE chart:

As you can see, price has wicked down into the 78.6% Fibonacci retracement a couple of times already, finding immediate support and bouncing both times.

HIVE ticks the boxes of being a fundamentally strong cryptocurrency whose price is being influenced by unrelated factors.

Namely Korean traders on UpBit taking advantage of HIVE’s extreme lack of liquidity and limited exchange listings.

If big players focused on the project’s fundamentals are looking for a zone to accumulate undervalued HIVE, then this 78.6% Fibonacci retracement is it.

As a retail trader, you can therefore prevent yourself from swimming against the tide by surfing the momentum they provide.

Best of probabilities to you.


Direct from the desk of Dane Williams.

Why not leave a comment on what you think about using the 78.6% Fibonacci retracement level. All comments that add something to the discussion will be upvoted.

This 78.6% Fibonacci retracement blog is exclusive to leofinance.io.

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