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  3. /Fibonacci Retracement
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Fibonacci Retracement

A technical analysis tool that uses horizontal lines at key percentages (23.

Definition

A technical analysis tool that uses horizontal lines at key percentages (23.6%, 38.2%, 50%, 61.8%, 78.6%) to identify potential support and resistance levels. These levels come from the Fibonacci sequence found in nature and math. The 0.618 level is the most watched, and crypto traders swear by it for finding bounce zones.

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Related Terms

Support

A price level where buying pressure tends to overcome selling pressure, preventing further decline.

Resistance

A price level where selling pressure tends to overcome buying pressure, causing price to stall or reverse.

Technical Analysis

Studying price charts and patterns to predict future movements.

Accumulation Phase

A period when smart money quietly buys up an asset before a major price move.

Annualized Return

The average yearly return on an investment, calculated to account for compounding.

Arbitrage

Profiting from price differences of the same asset across different markets.

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