How Do You Analyze Fibonacci Extensions in Bitcoin Trading?
Bitcoin Trade Fib Extensions in Bitcoin Trading
Fib extension levels btcusd crypto technical indicator is drawn using 3 bitcoin chart points.
To draw Fibo Extension levels 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 and gets to is used as cryptocurrency chart point 3.
The Fibonacci extension cryptocurrency example shown below shows the 3 Bitcoin Chart Points where the Fibonacci extension bitcoin technical indicator is drawn, labeled as Bitcoin Point 1, 2 & 3. Bitcoin Point 1 is where bitcoin cryptocurrency trend started, Bitcoin Crypto Currency Point 2 is where bitcoin trend pulled back and retraced & Bitcoin Point 3 is where bitcoin price retracement reached as is illustrated on the Fib Expansion Indicator cryptocurrency example shown below.
Fibonacci Extension Strategy using Fibonacci Expansion Levels
Please note where these Fibonacci Extension levels are drawn - Fibo Extension levels are drawn above the Fibonacci Indicator, these are areas where trader will set the bitcoin take-profits using these Fibonacci Expansion Levels - 61.80% & 100% Fibonacci Expansion Areas.
Drawing Fibonacci Extension Levels on an Upward Bitcoin Trend
We use Fib expansion levels to estimate/gauge where the btcusd crypto trend movement will get to. There are Two crucial Fibonacci extension levels: 61.8 % & 100% Fibo Extension Areas, these are used for taking profit.
On the Fibonacci extension cryptocurrency example illustrated below you as a trader can see that the Fibonacci extension bitcoin technical indicator is plotted along the direction of the btcusd crypto trend, since the bitcoin trend is upward - the Fibonacci extension cryptocurrency indicator is also drawn upwards.
These Fibonacci extension levels are illustrated as horizontal lines above the Fibo Extension technical indicator, showing the taking profit zones. In the cryptocurrency example illustrated below if you had used of 100% Fib extension you would have made nice profit from the bitcoin trade setup.
Drawing Fibonacci Extension Levels on an Upwards Bitcoin Trend - Fibo Extension Strategies in Bitcoin Trading
From the above Fibonacci extension bitcoin examples, the upward bitcoin trend continued & both 61.80% & 100.0% Fib extension levels were all hit after which bitcoin price retraced again after hitting the 100.0 % Fibonacci Extension level.
Drawing Fib Expansion Areas on a Downwards Bitcoin Trend
Since we use this Fibonacci extension bitcoin indicator to estimate/gauge bitcoin take profit levels, how do we draw it in a downwards bitcoin trend?
We draw the Fibonacci extension bitcoin indicator from cryptocurrency chart point 1 to 2 to 3 like is shown below. Remember we always draw this Fibonacci extension tool in direction of the cryptocurrency trend. In the Fibonacci extension cryptocurrency example illustrated below, can you figure what direction we've drawn it? That is right - downwards direction on the bitcoin chart.
Try & spot the difference between how we have drawn the Fibonacci extension above and how Fibonacci Extension is drawn below. This time you would also have used Fib extension area 100 percent, just where the bitcoin crypto currency price reached as is illustrated on the cryptocurrency example shown below. That would have been a nice btcusd crypto take profit order level.
Drawing Fibo Extension Areas on a Downwards Bitcoin Trend
From the Fibonacci extension cryptocurrency illustration put on display above, after plotting this Fibonacci extension tool there are 2 levels that are used to show and display the bitcoin profit booking zones, these 2 Fib extensions are drawn as horizontal lines across the bitcoin price chart.
How Do I Read Fibonacci Extensions in Bitcoin Trading
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