Golden Ratio, BTC/USD, ETH/USD, Technical Outlook, Edition #79 (14/08/21)

Buyers celebrate as Bitcoin crosses liquidity zone, volatility risk looming. Don't miss the special feature breakdown of the Golden Ratio and check the latest forecasts before the week's end!

Latest chart forecasts, Weekend Special featuring the 'Golden Ratio'

Bitcoin now crosses into the 'liquidity zone'.

Two macro .618 fib retracement pivots highlight a USD 3K range between USD 48K and USD 51K.

Bitcoin, BTC/USD - Daily (D1)

Q's Major Technical Principle - The 'Golden Ratio'

What is the Golden Ratio?


The 'Golden Ratio' is commonly referred to as:

  • .618 

  • Phi

  • Golden Mean

  • Divine Proportion

Attempts to determine a predictable pattern on well... Everything! 

You'll find the ratio appear in nature:

And as far and away as the stars: 
This mathematical ratio appears everywhere.

Extensively used by the ancient Egyptians and Greeks, the Golden Ratio has endured the test of time spectacularly and found its way into the financial markets.

And better yet, our dear friend Leonardo of Pisa supplied us with a simple method of quickly approximating the Golden Ratio - the Fibonacci number sequence!

It might surprise ol' mate Fibonacci to learn that .618 is damn good at estimating support and resistance levels. 

Now you have context on the Golden Ratio, let's return to the weekend technical analysis...


Q’s Technical Forecasts

Consider that the BTC/USD trading pair is now caught between two of these Golden Ratios.

The Qluster analytics team anticipates looming volatility and seek precautionary provisions to minimise risk exposure. 

Achieve a reduction in downside risk by either or both:

  1. Tightening stop-losses 

  2. Hedging long positions (leveraged buys) with minor short exposure (leveraged sell) 

The team reiterates tentative steps until further confirmation of bearish activity manifests. 

In this case, consider participation on the way down by staggering additional short exposure.

Ethereum, ETH/USD - Daily (D1)

Conversely, ETH/USD currently faces a much tighter range between the two 'golden' ratios as it reclines between USD 3.23K and 3.36K. 

Q's Conclusion

It is too early to tell if this is the end of our relief rally from the low of USD 29K. 

However, playing both sides of the market means you won't get caught with your pants down. 

Be warned - this type of hedging strategy is not for inexperienced traders and is intended for educational purposes only.

Risk-mitigating alternatives? Tightening up stop-losses to protect capital and profits is a good start.

See you again for the next update.

- q

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