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Home Cryptocurrency news

Correlated Chaos: Bitcoin, Dow, SP&500, and Gold Held At This Mathematical Level

Tony Spilotro by Tony Spilotro
1 year ago
in Cryptocurrency news, Bitcoin
Reading Time: 3min read
bitcoin gold dow jones industrial average s&p500 stock market math mathematical gann fibonacci
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In a strange turn of events, as financial markets of all types are collapsing due to growing fears over the spread of the coronavirus, Bitcoin, the Dow Jones Industrial Average, the S&P500 and gold, have all fallen to the same exact key mathematical level.

But why are these typically uncorrelated assets suddenly showing such commonality, and what is the significance behind the math that caused these assets to suddenly bounce?

Bitcoin, Gold, Dow Jones, and S&P500 All Fell to This Mathematical Level

Mathematics is the science behind and study of space, structure, quantity, and change. It’s been studied since the dawn of time and is among the most powerful laws governing everything around us.

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Because it is ever-present, it’s often a tool traders and analysts turn to, to attempt to gain a competitive edge in financial markets like the stock market or cryptocurrencies.

Related Reading | Is the Coronavirus The Black Swan Event That Crushes Cryptocurrency?

Math may just be so powerful, that despite the unpredictable impact of the coronavirus – a potential black swan event – that it was able to predict just where the recent stock market collapse and the selloff in gold and cryptocurrencies would find support.

According to an article published this morning by Bloomberg, an 800-year-old mathematic principle born from Leonardo of Pisa during the 13th-century, perfectly predicted where the recent pullback in the S&P500 would end.

Oddly enough, the same level was respected and also held on price charts for Bitcoin, gold, and other stock market indexes like the Dow Jones Industrial Average.

Each of these assets retraced perfectly to the 50% level or the 0.5 Fibonacci level.

bitcoin gold dow jones S&P500 charts

50% Trend Retracements Are the Most Profitable, According to Legendary Trader

Fibonacci numbers and their ratios are found everywhere in nature and regularly act as important levels for psychological support on financial asset price charts like Bitcoin, gold, the Dow, or the S&P500.

This same theory has been used by traders and analysts for generations with much success. Legendary trader W.D. Gann, during the early 1900s, discovered that the most profitable retracements to trade were the 50% level, and the level became a cornerstone in his analysis and teachings.

According to Gann theory, 50% psychologically is the “danger zone” for assets because it is where a full reversal can occur. But it also serves as the best possible place to reenter an “existing trend.”

Related Reading | Stock Market, Bitcoin, and Gold: Everything Is Collapsing Together 

If the trend resumes, Gann explained that the asset would more than likely breach its previous high, and his teachings on the subject potentially were the first examples of “buying the dip” ever recorded.

Although markets have been in a downward spiral due to the coronavirus fears, investors are buying the dip at this critical level, and it could be their most profitable trade yet according to the math.

Tags: bitcoincryptodow jones industrial averagefibonaccigoldmathmathematicsS&P500
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a global remote work leader with a decade of award-winning content experience and excellence. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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