5 Min Challenge – RSI, Trends & FIB Tool – Part 2

Moving average lines (also known as MA lines) are a part of chart TA because it helps to identify where price action is getting its support and resistance zones created for markets to be able to establish a short term direction.

The charts that I provide to you with links have a total of 4 MA lines that appear:

• 10 MA (Green)
• 50 MA (Teal)
• 100 MA (Blue)
• 200 MA (Purple)

Key note: Always remember that "support" means where price candlesticks are "above" the line and "resistance" is where candlesticks are "below" the line.

**Click the image for a larger view**

RSI (Relative Strength Index) levels have also been the main focus for when to sell a coin. In this pic, the RSI level is at 59.

As you have seen in your RSI training links page, I have a RSI Levels Chart that has buy zones identified for you. However, this question is about "selling" in relation to the RSI chart. Please see the bullet list below for help with how to get the right answer.

Using the link above to the RSI Levels Chart compare the information below:

• "Very Risky Buy Zone (55-65)" is the same as a "Good Sell Zone"
• "Do Not Buy Zone (Over 65)" is the same as a "Very Good Sell Zone"
• Extra note - any RSI over the 75 level would be considered a "Great Sell Zone"

**Click the image for a larger view**

When we need to understand market trends, there are only 3 types of trends we ever need to know. Uptrend, downtrend and sideways trend.

• An "uptrend" is when a market price candlestick direction has the bottoms of the candlesticks going higher than the previous candlesticks.
• A "downtrend" is when a market price candlestick direction has the tops of the candlesticks going lower than the previous candlesticks.
• A "sideways trend" is when there is now significant change in direction of the tops or bottoms of candlesticks during a period of time.

**Click the image for a larger view**

When the RSI level is at or near its lower points (30 level) or the higher points (7o level), the trend lines that are in progress on the RSI chart "will be" broken to the opposite direction assuredly. 

The reason for this is because the strength in the market must "always" work back toward the "middle" or "equilibrium" zone around the 45-55 levels at some point. Also, markets do not have RSI survive below the 30 level for more than 24 hours (1 day) on most markets with any volume. The same could also be said for markets that show RSI at or above the 70 level.

With that said, the yellow trend line shown on the chart pic below is touching the 70 RSI level around Aug 30 according to the date and time line at the bottom of the chart itself.

At some point, there is a very high probability that this line is broken to the downside.

**Click the image for a larger view**

In chart TA, we use a tool called the Fibonacci retracement too (also known as the FIB tool). If properly used, this tool allows us to predict certain price levels long before the market arrives at those levels.

There are many theories that can be used with this tool. The main theory that I have been making mostly all of my price predictions on is based on the .618 and .786 FIB levels after a market price peak or bottom has been confirmed.

In the pic below, I have drawn the FIB tool on the right side of the price chart for you to identify the different FIB levels based on the grid lines that represent the market prices that would be suggested at those levels.

**Click the image for a larger view**

As mentioned in question #5 above, the FIB tool is used primarily to "predict" future price levels on the market based on "past activity" in the candlesticks. Using the pic below, I have prepared a FIB grid and some highlighted key FIB levels for you to "predict" your future price of the ENJ/BTC market.

Things that you need to know to help you with your price selection are as follows:

1. This pic of the market goes back to July 7 to the present time of August 29
2. There are 2 horizontal lines I have drawn on the chart to represent the 2 most important FIB levels:  .618 (pink) and the .786 (yellow) 
3. The green vertical line represents the starting point for tracking the price levels on July 7
   1. The #3 above is for the purpose of this question and your prediction, nothing prior to that date will be used for this question
4. NOTE: The total number of times the market retested (down to) the pink line since July 7 was 4 times
5. NOTE: The total number of times the market retested (down to) the yellow line since July 7 was 0 times
6. The pink line represents a price of 3357 sats; and the yellow line represents a price of 3052 sats
7. The lowest price that fell between the pink and yellow lines was 3156 sats
8. It took the market 6 days to go from a previous top price of 4470 sats down to the 3156 sats price as given above in #7

KEY NOTE: When markets are very consistent in their behavior, it is best to just (follow the trend) until it changes. In this case, the real trend in the market since July 7 has been that the price failed to drop (below) the 3156 price level. So when making your prediction, the (best thing) to consider is to (stay between) the 3156 sats (lowest price recorded) and the 3357 sats (pink line at the .618 FIB level) for your (specific price).

Using the information above, you can at least have a good idea of a price range to work with on your predictions. Just know that the prediction that comes closest to the "actual" lowest price recorded on the market as of 9/5 8:00pm EST will be the price to compare your predictions with. 🙂

**Click the image for a larger view**