why & how i use fibonacci retracements on memecoins:
(using $popcat as an example)
- i only use .618 & .786 as "zones"
- .618 & .786 show a ~60%+ & ~80% pullback
- which tends line up well with the fearful side of the human psychology of trading
why?
- a majority of people probably bought at bad entries and are getting scared as their PnL turns negative
- early buyers will be getting scared they'll lose all their profits
- both parties will get shaken out which almost always leads to a ~80% pullback
that ~80% pullback ALMOST ALWAYS comes down around a psychological support level or "zone"
(i.e whole numbers like 0.1, .5, 1.0, 1.5, etc.)
and will typically go slightly past it or stop just before it before moving back up
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this is not a perfect science
but using .618 & .786 in combination with identifying psychological "zones"
tends to consistently mark bottoms and good buy zones on memecoins
especially with very established/strong ones like $popcat