Better Technical Analysis with Blockchain Indicators Part II: Fibonacci Retracements

Some insights about how blockchain analysis can complement some of the most famous technical analysis indicators.

This is the second article in a series that explores how blockchain datasets and metrics can complement traditional technical analysis indicators. The first article of the series focused on blockchain analytics that could help with mean reversion TA methods such as Bollinger Bands. Today, I would like to drive our attention to, arguably, the most popular for of TA analysis: support and resistance

The concepts of support and resistance are an omnipresent element in modern TA. Conceptually, both support and resistance identify pricing points on an asset that favor a pause or reversal of a given trend. More specifically, support represent price level that the asset will not fall below while resistance is a price level that the asset can’t seem to rise above. Obviously, the extrapolation of support and resistance levels is deeply rooted in trying to model the psychological behavior of different investors as it tries to correlate price fluctuations with potential levels of accumulation. In modern TA, there are different methods such as Fibonacci Retracements, Wolfe Waves, Camarilla Pivots, Murrey…