Those Bitcoin bulls who were prematurely targeting the $9,200 level might be in for a rude awakening.<\/p>\n
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.<\/p>\n
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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.<\/p>\n
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.<\/p>\n
The 61.8 percent retracementlevel, whichis known as \"the golden ratio,\" has been historically important for Bitcoin's price action.<\/p>\n
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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.<\/p>\n
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.<\/p>\n
Whether you believe in Fibonacci retracement levels or not, this certainly gives the bulls a lot of food for thought. <\/p>\n
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