4 Trading Tips to Efficiently Use Fibonacci Levels | And More in This Weeks Crypto Update.
- Ravencoin Closes Above 200 MA and RSI Above 50
- Ethereum Pre-Merge Pattern and Post-Merge Pattern
- Crypto Trading 101: 4 Trading Tips to Efficiently Use Fibonacci Levels
Ravencoin Closes Above 200 MA and RSI Above 50
Ravencoin (RVN) has broken above its crucial resistance of the 200-day simple moving average, which has the potential to mark a change in the trend direction. Additionally, the daily chart shows a hidden bullish divergence between the price and the RSI oscillator, adding more confluence to the bullish case scenario.
200-Day Simple Moving Average
Since the start of the year, this is the second attempt for RVN’s price to break above its 200-day simple moving average. The first attempt was right at the beginning of the year, but RVN’s price failed to gain more traction above the 200-day SMA.
The area between $0.040 and $0.042 was a strong resistance that the bulls managed to overcome and now has the potential to turn into a new support level. We’re also starting to make higher highs, which is the very definition of an uptrend.
RSI Hidden Bullish Divergence
The possibility of a continuation above the 200-day simple moving average is also supported by the RSI hidden bullish divergence, which is a reversal signal. The recent price action shows RVN printing higher lows while, at the same time, the RSI made a lower low near the $0.027 level.
The RVN’s price needs to stay above its 200-day SMA for bullish momentum to continue. In this regard, any pullback into the $0.040 level needs to fail; otherwise, we may end up either resuming the downward trend or, at best, entering into a prolonged consolidation phase.
What is Ravencoin?
Ravencoin is a digital asset and blockchain platform that was created to facilitate the transfer of assets such as tokens, assets, and smart contracts. The platform is built on a fork of the Bitcoin code and uses the UTXO model. Ravencoin also has a unique feature that allows users to create their own tokens. The Ravencoin network is fast, secure, and scalable.
Ethereum Pre-Merge Pattern and Post-Merge Pattern
Understanding Ethereum’s (ETH) price action before the merge event can give us further insight into what may lay ahead. Chart patterns are real, and the historical price action tells us they are repetitive. Based on the price action structure, it appears we’re in the process of developing a Zig-Zag pattern, which is a price sequence where the first leg and the last leg are more or less similar.
Ethereum Pre-Merge Pattern
Based on the Elliott Wave analysis, Ethereum is forming a zig-zag pattern in the cycle from the mid-June low. In the first leg up (wave A), the price shows a five-wave price structure. Then the price has retraced in wave B bottoming at the $1,424 low.
The current price action structure suggests ETH’s price is calling for further strength as long as the $1,424 low holds the downside. It may be that post-merge, ETH’s price will surge to complete wave C of the zig-zag pattern.
Wave C should have the same internal 5-wave price structure as wave A, which, if it transpires, should call for further strength above the $2,000 psychological level.
Looking forward: The next big hurdle once the $2,000 level is cleared is the 200-day simple moving average, which currently stands at $2,080. If wave C equals wave A, we can potentially see ETH’s price hitting $2,500 during the current bull run.
What does the Ethereum Merge mean?
The Ethereum Merge, which has been delayed for several years, is scheduled to take place in just a few days September 15–16. The Merge, also touted as Ethereum 2.0 or ETH 2.0, will most likely take place September 15–16. The widely-anticipated Merge is an upgrade from the current proof-of-work consensus to a more energy-efficient proof-of-stake consensus system.
This means that it will replace miners, which consume decentralized computational power in verifying transactions, with validators. The validators will instead lock up or stake their digital assets in the network for ETH rewards, reducing energy consumption by 99%. ETH 2.0 is predicted to improve security and scalability, and minimize the Ethereum Network’s carbon footprint.
You can read more in our blog about the Ethereum Merge here.
Crypto Trading 101: 4 Trading Tips to Efficiently Use Fibonacci Levels
The Fibonacci retracement levels are one of the most widely supported support and resistance levels used to pinpoint potential reversal points. In this trading guide, we’re going to share some of the most powerful techniques for building a trading strategy using the Fibonacci retracement tool.
What are Fibonacci Levels?
Fibonacci levels are mathematical calculations that are often used by traders to predict market movements. Fibonacci levels can be used on any time frame, but they are most commonly used on daily or weekly charts. There are several different Fibonacci levels, but the most important ones are the 0.618, 0.786, and 1.000 levels. These levels can help traders predict where the market is likely to move next and make better trading decisions.
#1 Choosing the correct Swing High/Low
First, drawing the Fibonacci retracement level relies on swing high and low points. In this regard, the most important aspect is to choose the correct price swings; otherwise, the Fibonacci levels won’t have a meaningful impact on the price.
To correctly pick the proper swing levels, traders should focus on the price momentum and the trend. As a general rule, use those swing high/low points from where price had a strong directional movement.
#2 Focus on Higher Timeframe
Focusing on the long-term trend can be more meaningful, and the Fibonacci levels would carry more weight. By comparison, the intraday charts will provide you with multiple price swings, which have a lot of noise and are not that relevant.
#3 Golden ratio of 61.8% is the Most Important Fib Level
Most price retracements are expected to fail at the 61.8% Fibonacci level. The 61.8% fib level is known as the golden ratio because every number in the Fibonacci sequence is 1.618 times the prior number; therefore, this level carries a lot of weight.
#4 Fib Confluence with Simple Moving Averages
Combining more than one trading technique can increase the chances of a reliable trade setup. For example, a simple moving average works well together because both indicators work best in a trending market.
The simple moving average is a great tool to determine dynamic support and resistance level that, when aligned with a Fib level, it can provide profitable trade setups.
Bottom Line: While no trading tool has a 100% accuracy rate, the Fibonacci levels are useful in finding hidden dynamic Support and Resistance levels that other don’t see with the naked eye.