How Do I Analyze Fibonacci Expansion Levels in Bitcoin Trading?
Bitcoin Trade Fibonacci Expansion Levels in Bitcoin Trading
Fibonacci expansion bitcoin technical trading indicator is drawn using 3 bitcoin chart points.
To draw Fibonacci Expansion levels on crypto charts we wait until the bitcoin price retracement is complete & the bitcoin price starts to move in the original direction of the Bitcoin trend. Where the bitcoin price retracement reaches is used as cryptocurrency chart point 3.
The Fibonacci expansion cryptocurrency trading example illustrated below shows the 3 Bitcoin Chart Points where the Fibonacci expansion bitcoin indicator is drawn, marked as Bitcoin Chart point 1, 2 and 3. Bitcoin Chart point 1 is where the bitcoin trend started, Bitcoin Chart point 2 is where the bitcoin trend pulled back and retraced & Bitcoin Chart point 3 is where the bitcoin price retracement reached as shown on the Fibonacci Expansion Bitcoin Trading Tool cryptocurrency trading example illustrated below.
Fibo Expansion Strategy using Fibo Expansion Areas
Please note where these Fibonacci Expansion levels are plotted on the cryptocurrency chart - Fibo Expansion levels are plotted above the Fibonacci Crypto Indicator, these are points where the trader will set the bitcoin take profit orders using these Fibo Expansion Levels - 61.80% & 100% Fibonacci Expansion Areas.
Drawing Fib Expansion Levels on an Upward BTCUSD Trend
We use Fibo expansion areas to estimate where the bitcoin trend movement will reach. There are 2 important Fib expansion areas: 61.8% & 100% Fibonacci Expansion Levels, these Fibonacci Expansion Levels are used for taking bitcoin profit.
On the Fibonacci expansion cryptocurrency trading example illustrated below you can see that the Fibonacci expansion cryptocurrency technical indicator is plotted along the direction of the bitcoin trend, since the bitcoin trend is upward - the Fibonacci expansion cryptocurrency indicator is drawn upwards.
These Fibo expansion levels are displayed as horizontal lines above the Fibo Expansion indicator, showing profit taking areas. In the cryptocurrency trading example illustrated below if you had used of 100% Fibonacci expansion level you would have made nice bitcoin profit from the bitcoin trade setup.
Drawing Fib Expansion Levels on an Upward BTCUSD Trend
From the above Fibonacci expansion bitcoin trading examples, the upward bitcoin trend continued & both 61.80% & 100.0% Fibonacci expansion levels were all hit after which bitcoin trading price retraced again after hitting the 100.0 % Fibonacci Expansion level.
Drawing Fibo Expansion Areas on a Downward Bitcoin Trend
Since we use this Fibo expansion bitcoin trading tool to estimate bitcoin take profit levels, how do we draw it in a downward Bitcoin trend?
We draw the Fibonacci expansion cryptocurrency indicator from cryptocurrency chart point 1 to 2 to 3 as shown below. Remember we always plot this Fibonacci expansion bitcoin trading tool in direction of the cryptocurrency trend. In the Fibonacci expansion cryptocurrency trading example illustrated below, can you figure what direction we have drawn it? That is right - downwards direction.
Try & identify the difference between how we have drawn Fibonacci expansion levels above and how Fibonacci Expansion Indicator is drawn below. This time you would also have used Fibonacci expansion level 100%, just where the bitcoin price reached as displayed on the cryptocurrency trading example illustrated below. That would have been a nice bitcoin take profit area.
Drawing Fib Expansion Areas on a Downward Bitcoin Trend
From the Fibonacci expansion cryptocurrency trading example above, after plotting this Fibonacci expansion tool there are two levels that are used to show the bitcoin profit taking areas, these two Fibonacci expansion levels on the bitcoin indicator are drawn as horizontal lines across the bitcoin trading price chart.
How Do You Read Fib Expansion Levels in Bitcoin Trading
