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Psychologicalroundnumber

Understanding Price Clustering in the Bitcoin Market█ Understanding Price Clustering in the Bitcoin Market Price clustering is a phenomenon where certain price levels, particularly round numbers, tend to appear more frequently in financial markets. This study focuses on how price clustering occurs in the Bitcoin market, providing insights that can be valuable for traders. █ The Psychology Behind Price Clustering One of the primary reasons behind price clustering in the Bitcoin market is the psychological impact of round numbers. Market participants often perceive prices ending in 0 or 00 as significant, which leads to a concentration of buy and sell orders around these levels. This behavior is not unique to Bitcoin; it has been observed across various financial markets, from stocks to foreign exchange. For instance, when Bitcoin prices approach a round number like $30,000 or $50,000, traders might expect strong resistance or support at these levels. This expectation can lead to increased trading activity, causing prices to cluster around these key levels. The psychological importance of these numbers can also cause traders to place stop-loss or take-profit orders around them, further reinforcing the clustering effect. █ Key Findings from the Study ⚪ Clustering Around Round Numbers: The study highlights that Bitcoin prices tend to cluster around round numbers, such as $10,000, $20,000, or $50,000. This is primarily driven by psychological barriers, where traders view these round numbers as significant price levels, leading to an increased concentration of trading activity. ⚪ Impact of Time Frames: The extent of price clustering varies significantly with the time frame. In shorter time frames (like 1-minute or 15-minute intervals), price clustering is less pronounced due to the randomness of price movements. However, as the time frame lengthens (hourly or daily), the clustering effect becomes more apparent, suggesting that traders may be more likely to anchor their strategies around these round numbers over longer periods. ⚪ Differences in Open, High, and Low Prices: The study also finds differences in clustering patterns between open, high, and low prices. High prices tend to cluster around the digits 8, 9, and 0, while low prices cluster around 1, 2, and 0. Open prices generally show less clustering, suggesting they are less influenced by immediate market psychology. This pattern suggests that traders should pay particular attention to high and low prices during trading sessions, as these are more likely to show clustering around key levels. High Price: This is the highest price that Bitcoin reaches during a specific time period (for example, during a day or an hour). The study found that high prices cluster more around certain numbers, especially numbers ending in 0 or 9. So, high prices often end in numbers like $10, $100, $1,000, or $9,999 because traders tend to react to these round numbers. Low Price: This is the lowest price Bitcoin hits during a certain time period. Similar to high prices, low prices also cluster, but more around numbers ending in 0 and 1. So, low prices might end in numbers like $10, $1,001, or $5,001. Why is there a difference? High prices tend to cluster at numbers ending in 0 or 9 because those feel like natural stopping points for traders. Low prices tend to cluster at numbers ending in 0 or 1 for similar reasons. ⚪ Price Level Influence: The study highlights that clustering behavior changes with the overall price level of Bitcoin. At lower price levels (e.g., below $10,000), there is more clustering around multiples of 5, such as $25, $50, or $75. As the price increases, the significance of these smaller increments diminishes, and clustering around larger round numbers becomes more dominant. █ Practical Insights for Retail Traders Understanding price clustering is crucial for traders because it sheds light on how market participants behave, particularly around psychologically significant price levels. These insights can help traders anticipate where the market might encounter resistance or support, allowing them to make more informed decisions. ⚪ Identify Key Psychological Levels: Retail traders can benefit from identifying and monitoring round number levels in Bitcoin prices, such as $10,000, $30,000, or $50,000. These levels are likely to act as psychological barriers, leading to increased trading activity. Understanding these levels can help traders anticipate potential support or resistance areas where price reversals may occur. ⚪ Adjust Trading Strategies Based on Time Frame: The study suggests that the effectiveness of using price clustering in trading strategies depends on the time frame. For short-term traders, clustering may be less reliable, but for those operating on longer time frames, clustering around round numbers could provide actionable signals for entry or exit points. ⚪ Focus on High and Low Prices: Retail traders should pay particular attention to clustering in high and low prices during a trading session. These prices are more likely to exhibit clustering, indicating areas where traders might place stop-loss orders or where price reversals could occur. By aligning their trades with these clusters, traders could improve their risk management. If you’re setting stop-loss orders, for instance, placing them just beyond a cluster point could help you avoid being stopped out prematurely by normal market noise. Similarly, identifying clusters at high prices could offer better opportunities for taking profits. ⚪ Consider the Overall Price Level: The level at which Bitcoin is trading also affects clustering. For example, when Bitcoin is at a lower price, traders might find opportunities by focusing on price levels ending in 5 or 0. However, as Bitcoin’s price increases, clustering becomes more concentrated around larger round numbers. Adjusting trading strategies to consider the current price level can enhance decision-making. Price Clustering at Low Levels (<$10 USD): There is significant clustering at prices ending in 0, but also notable clustering at prices ending in 5, which acts as a psychological barrier at these lower levels. Prices ending with 50 are also frequently observed as significant psychological barriers. Clustering is weaker overall at these levels compared to higher price ranges, but still noticeable at certain intervals. Price Clustering at Mid-Levels ($100–$1,000 USD): Clustering becomes more focused on round numbers like 00, 50, and 25. As prices increase, clustering around smaller numbers like 5 or 10 reduces. Larger psychological barriers, such as 100 and 500, emerge as significant points of clustering. Price Clustering at Higher Levels (≥ $10,000 USD): At these price levels, clustering becomes even more prominent around major round numbers like 10,000, 20,000, etc. The last two digits 00 become much more frequent, and there is almost no clustering at digits like 5 or 1. Clustering becomes very strong at larger round figures, with a strong psychological barrier hypothesis at play. Summary of Clustering at Different Levels: Low Prices (<$10): Clustering at 5, 10, 50, and 100. Mid Prices ($100–$1,000): Strong clustering at 00, 50, and 25. High Prices (≥$10,000): Dominant clustering around 00 and multiples of 1,000 (e.g., 10,000, 20,000). █ Conclusion Price clustering is more than just an academic concept; it’s a practical tool that can significantly enhance your trading strategy. By understanding how prices tend to cluster around psychological levels, adapting your approach based on time frames, and recognizing the impact of Bitcoin’s price level, you can make more informed trading decisions. By integrating these insights into your trading plan, you’re not only aligning your strategy with the behavior of the broader market but also positioning yourself to capitalize on key price movements. Whether you’re a seasoned trader or just starting out, the knowledge of price clustering can help you navigate the volatile Bitcoin market with greater confidence and precision. █  Reference Xin, L., Shenghong, L., & Chong, X. (2020). Price clustering in Bitcoin market—An extension. Finance Research Letters, 32, 101072. ----------------- Disclaimer This is an educational study for entertainment purposes only. The information in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell securities. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on evaluating their financial circumstances, investment objectives, risk tolerance, and liquidity needs. My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
COINBASE:BTCUSDEducation
by Zeiierman
7
First Republic Bank Continues Below $5Merely an update to my previous idea. And well... I started this idea before the bell, and it was $3.51 at the time. It's now $2.01 post as of typing this but that will be different already. I think I will just post this as is, because it's moving too quickly to make any rational conclusions. To be noted, every time $15 was broken, the market dumped it below preventing it from becoming proper support. Now, the HKEX:5 line is going to be doing similar tricks on it and FRC fell below it. Notice the two more recent dead cats I have professionally marked 😼 I did not have HKEX:3 price line on my previous chart, but I see that now there's a clear line there as well. Only psychological levels matter at this point. Same ideas: *It's a personal opinion of mine that psychological levels, whole number resistance and support, should have this much control over price action. Psychological levels have the most effect when there's extremes of emotions. I feel it's rather self-explanatory. It's either going towards zero or it's getting bought to prevent it from hitting the pavement. The variance in price alone is a clear indicator its in deep trouble while it was just downgraded to BB. Previous low on charts of $17.60 is notable, while HKEX:20 pertains to psychological significance. Below this, I see little more than psychological levels. HKEX:10 , double digits. HKEX:5 , where select exchanges consider a stock a penny stock. HKEX:1 , where the rest consider it a penny stock. You can label a ton of this chart a deadcat bounce here or there. Please add thoughts. I didn't see a Fibonacci ladder helping much because the price action was too chaotic. DYOR/DYOC.*
NYSE:FRCShort
by mrniemeier
Insane run losing charge? $TSLAWhat to make of the fact Tesla is losing steam? The market share will be threaten from this point as more EV's are making their way to the fray. This is the second hump on what looks like an M pattern. Is this the first sign of Tesla filling some lower gaps starting with the one below 156? Bullish Case - This is the leading EV maker. With the combination of price drops and tax credits we are looking at the consolidation before a break to fill the gap above. Lets see if this support holds and with is market share it should be an easy task. Bearish Case - Look at the combination of lower highs and lower lows. It is working on a channel to work it way to break out of the M pattern it is forming. If so, look for that measured move under 140. This is a tough ask, after the gap I can see the psychological number of $150. Either way the gap below will be filled.
NASDAQ:TSLAShort
by JDTheGreat
Downgraded From BB+ To BBIt's a personal opinion of mine that psychological levels, whole number resistance and support, should have this much control over price action. Psychological levels have the most effect when there's extremes of emotions. I feel it's rather self-explanatory. It's either going towards zero or it's getting bought to prevent it from hitting the pavement. The variance in price alone is a clear indicator its in deep trouble while it was just downgraded to BB. Previous low on charts of $17.60 is notable, while $20 pertains to psychological significance. Below this, I see little more than psychological levels. $10, double digits. $5, where select exchanges consider a stock a penny stock. $1, where the rest consider it a penny stock. You can label a ton of this chart a deadcat bounce here or there. Please add thoughts. I didn't see a Fibonacci ladder helping much because the price action was too chaotic. DYOR/DYOC.
NYSE:FRCShort
by mrniemeier
2
Bitcoin and MajorityWhat is happening with the market and BTC? Most analysts claimed 12–10–9–5 thousand marks for BTC Is it possible? — Perhaps. But why is the probability of falling further complicated? The story tied with FTX, Binance (CZ) and other personalities is like an artificial “Black Swan” in order to intimidate weak hands, instill fear and horror in market participants, and buy the right people cheaper in order to subsequently sell more expensive. “When you are almost a monopolist, you are in charge of the market, not you.” Everything was about the same in 18–19 years — scam projects, small exchanges, mass liquidations and bankruptcies of projects. Selling on the loys then changed to a short-term bullish rally in half-empty order books (Fall Correction). History shows that the memory of kryptans is short, and many simply do not see that history repeats itself, just on a large scale. Got fear? Of course, well-known publications, personalities, television are already burying the crypt… Almost everywhere now there are negative headlines about problems with exchanges and the need for strict regulation. Crypto is no longer associated with profits, but with losses. As a rule, the market does not reverse at the moment when people see a comfortable and profitable entry point. A reversal occurs at a moment when no one wants to buy anymore and most in fear and horror think only about selling. Back to our global notation for the next bull market -To date, the bearish phase lasts over 375 days. In the 1st cycle, it lasted 413 days In the 2nd cycle, it lasted 357 days. Judging by the timings, the bottom is somewhere close, or already … After each phase followed, the phase of accumulation, in which just we received a correction of the fall. This is really the cycle of any market: Accumulation / Growth / Fall. This is our opinion and may not be yours. Will BTC cost 12–10–9–5 thousand, yes please, buy it at these prices too … But unfortunately, many market participants who dreamed of buying it for 40–50 thousand dollars for 10 thousand dollars will not do this, because these are weak hands, it will be even worse for them.
BITSTAMP:BTCUSD
by Crypto4light
Apple has some work to doLooking at $AAPL it is going to have to prove that it can hold this support above 125. Looks like we filled the imbalance completely and loss support. Can they hold above 130? Well if not look for it to retest 125 again!?! But this time it might be enough to have it fall to new lows. The rejection of the EMA coincides with this theory. Bullish Case 128 is a key level to have higher lows show up on lower timeframes. I this the rejection is the rest of the order waiting to fill between 127 and 128. Look for the bounces here. Bearish Case 130 psychological level has proven sell orders waiting there. 128 won't hold as this is the top of a range. This is something to play back down to 125.
NASDAQ:AAPL
by JDTheGreat
Psychological round numbers trading strategyHello traders! I have been working on this strategy for the past week and it's perfect to avoid any kind stop loss hunting and it also helps us to remain in a trend. It's not a strategy that I have created but it's an old strategy where most of the time market reacts at the psychological levels. The Trend In this strategy, we will only move in the direction of the trend and we can check the trend in the 200 Moving Average in D1 timeframe. In this case, the candles are below 200 Ma so we will only sell from key levels. The strategy In this strategy, the psychology numbers or key levels are the round figures. In this case, we are using Even round figures. I tried shorter numbers in BTC and they didn't work so we will trade the numbers that are perfect. I found out these even round numbers are working fine. Most of the time Market is reacting to these levels and we will take benefit from it. The market moves from zone to zone and if there is a perfect reaction at the entry zone then it will move to the next zone and will hit our target. The IMPORTANT point to understand First, let the market cross the key level and let the candle close below the key level in at least 1hr time frame for entry so that the past Key level will come alive. Suppose we are looking for an entry at 18K Key level so first let the candle close below the 16K level once there is a candle that closed below that level(which is already done) then you can put a short entry at 18K. Suppose the market was turning around from 16200 then we cannot put the sell entry at 18K but we can put the sell entry at 20K because if it failed to cross 16K it means the market must be aiming to break 18K and we cannot risk selling there. Rule We will not rely on the first entry only if the market moves in negative then we will enter again from the next Key level this will help us to end up in profit and it increases the chance of no loss but in some cases market does move in negative and hit the stop loss so it's important to use proper risk management. Risk Management Proper Risk management is important in this strategy because you can see movement is big and investment will be wiped out if you don't use proper risk management. The suggested Risk per trade is Use 2% amount at the first entry with 10x leverage and use 50% more which is 3% of the account if the market moves up and touches entry 2. Max, you can double these numbers if you are high-risk takers. Why use this strategy Previously patterns trading strategy was struggling whether it was a clear breakout or a fakeout. This season does not look good for pattern trading. The market was traveling in all directions so I struggled and find out the best strategy that is perfect according to the current scenario. Don't forget to hit the like button and follow to stay connected.
by Aadil1000x
2
The freefall of Nasdaq during the NFP Data Release !!!Risking just 100 pips, we are targeting 300 pips as our profit target. The 100 pips is just to give this trade enough space for the spikes during the NFP data release but i'm quite certain that the spike won't hit our stop due to the space we've given it !. This is a 3:1 trade. Trade responsibly !. Use proper risk and money management before executing this trade !. Don't be greedy !. Confluences for the SELL trade: 1. Chart patterns 2. Price has been severly overbought. 3. There is a clear solid resistance at the overbought psychological level 4. Candlestick patterns signaling massive bearish presence 5. Even if price won't sell 1000 pips, it must at least pullback to our retracement levels, hence the Fib Retracement Tool. Final Confluence you need to wait for before opening any position: 1. Break of the trendline 2. Shooting star and a bearish candle that engulfs the shooting star 3. Confirmation of the NFP news release
FX:NAS100Short
by LaBOSS_FX
5