2021 Fibonacci Channel + May Predictions
Updated: Apr 30
Since the start of February this year, Bitcoin prices have resided in a textbook Fibonacci Channel. Using 1 Day candles, the channel can be seen in the below chart:
Almost every bounce up or down has been at a Fibonacci Retracement level. Even more convincing is that when I make no changes to the channel when switching to a 4Hr candle chart, the channel is equally as apparent:
If you haven't read my last article relating Bitcoin price trends to the expiration of Bitcoin options, please do so! It explains much of my theory on how I chose the dates I did regarding when the prices will rise and fall. In addition, it describes how strike prices of these options have great influence on what the price of Bitcoin will be on the last Friday of every month when monthly Bitcoin options expire.
The estimated low of $55,300 at the end of May is a reasonable estimate due to Bitcoin's high volatility and it falling on the 0.236 Fibonacci Retracement level. Further research shows that this estimate also coincides with the current optimal strike price for options contract buyers to lose their money. Remember, options contracts are mostly sold by the "Market Makers" who have a lot of money and a lot of Bitcoin to manipulate prices to their liking. They try to keep the price around the "Max Pain Price" where the highest number of contracts will expire worthless. Below is the current open interest of options expiring May 28th, sorted by strike price. More contracts will be purchased over the next month, but the Max Pain Price is unlikely to see a considerable shift.
I'm keeping this newsletter short and sweet. I believe the charts provided defend my position well. This has been a busy couple weeks; we went from supporting 2 exchanges with our bot signals to supporting 12. Lots of testing and code writing errors on my part to get us there. I would say trial and error, but the errors outweigh the trials enough that the trials are approaching 0 in any reasonable analysis (I have no formal education in programming, just a hobby).
The next newsletter is going to review my most recent predictions and chart analyses and show you guys either how awesome or how much of a dipshit I am. I will always be honest to my readers, and when I fuck up I will let you know about it.