Hello there! I would like to share with you my theory about behaviour of the prices of cryptocurrencies - I named it "10/20 theory" and it is based on the prices of altcoins.
In technical analysis there are dozens of possibilities of marking/setting resistance and support prices, which are commonly used in financial markets. In addition to these levels, we can also designate psychological prices which can be considered as support and resistance levels themselves - they exist as characteristical (full) prices like 1$, 25 euro etc. In cryptocurrency market for altcoins mainly we use prices in satoshis and my theory is based exactly for this part of Bitcoin.
Theory may work only if:
- information and events of given projects do not change over time covered by theory (I name it as stagnancy of information)
- price of Bitcoin (and in future cryptocurrency with biggest capitalization on the market) with whole market is relatively stable over time covered by theory
Quarkchain (QKC) – Bitcoin (BTC); Binance, 120m; 10.10.2018 – 26.10.2018
X – 1000 satoshi; 1,1X – 1100 satoshi; 0,8X – 800 satoshi
I divided my theory into three stages:
Stage I (E1) (price below X level):
1 - Price goes up in stable way to the psychological level of resistance X price.
2 - Price can attack this level up to three times - after third unsuccessful one theory does not work anymore
Stage II (price above X level):
3 - After strong break of resistance X level, price raise up to the level of 1,1X price (+10% of price X).
4 - Price can attack three times 1,1X resistance level - it cannot be strongly broken (like in point 3)
Stage III (price below X level):
5 - After strong break of support level of X, price goes down to 0,8X (-20% of price X)
6 - After reaching 0,8X price, which is support level, price should bounce from this level although the possible level of the bounce is not determined by theory
For example i did some charts with marked prices 0.8X, X, 1.1X.
Lunyr (LUN) – Bitcoin (BTC); Binance, 120m; 21.10.2018 – 29.10.2018
X – 7500 satoshi; 1,1X – 8250 satoshi; 0,8X – 6000 satoshi
Substratum (SUB) – Bitcoin (BTC); Binance, 120m; 02.10.2018 –11.10.2018
X – 2000 satoshi; 1,1X – 2200 satoshi; 0,8X – 1600 satoshi
Of course, 0,8X and 1,1X levels are should not be considered as strict ones however they can visibly described as these levels. And very often the difference of maximum and minimum level is 0,3X - it is important note because if we are at the end of stage II we can re-set level of minimum price. For example: if the heighest point was at 1,115X we can expect price to bounce up before even reaching 0,8X level (that would make 1,115X - 0,3X = 0,815X as a level of bounce).