Bitcoin’s (BTC) Impressive Price Rally Might Have Already Ended. Here’s One Reason Why – U.Today

Those Bitcoin bulls who were prematurely targeting the $9,200 level might be in for a rude awakening.

According to trader Scott Melker, Bitcoin faced a severe rejection at the61.8 percentFibonacciretracement level, which might indicate that $9,000was the top of the recent rally.

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12th-centurymathematicianLeonardoFibonacci came up with thesequence of numbers that is supposed to define everything that we know in nature: from the galaxy to tree branches. His theory is also widely applied to different financial markets.

Fibonacci retracement levelsare used as a popular trading indicator even though many traders remain skeptical of whetherthey actually work. One has to divide a vertical lineby the majorFibonacci ratios to determine possible horizontal support and resistance levels.

The 61.8 percent retracementlevel, whichis known as "the golden ratio," has been historically important for Bitcoin's price action.

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Melker points to the fact thattheBitcoin price also tapped the 61.8% retracement level on Oct. 25 after when Bitcoin price pumped by about 40 percent on the news about Beijing endorsing Blockchain.

After a small period of euphoria, complacent bulls had to face a harsh reality, with Bitcoin shedding all of its gains in about a month and hitting the $6,400 low in December.

Whether you believe in Fibonacci retracement levels or not, this certainly gives the bulls a lot of food for thought.

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Bitcoin's (BTC) Impressive Price Rally Might Have Already Ended. Here's One Reason Why - U.Today