After the Wyckoff Distribution play I decided to keep track of the price action to see if the opposite, Accumulation, would happen. Now, I’m not saying this is 100% going to happen as Bitcoin could go both ways but I’ve been of the mind that Bitcoin would go sideways before moving to the upside so I’ve gone with this pattern and observed.
Over the last month there have been multiple Bitcoin announcements regarding real world use-case by nation states. At first we were hit by the China FUD but then the President of El Salvador stepped in to make Bitcoin a currency. Since then, other smaller developing countries have considered doing the same.
While the price action doesn’t show it, this is great for the crypto community and after seeing how Bitcoin’s price recovered, I’m more comfortable showing this chart as it has checked off a few validation marks. The most important to me being the VOLUME ON THE DAILY.
This is not financial advice, just a hypothesis on a possible pattern that has not confirmed.
Wyckoff Accumulation Explained
(PS) –Preliminary Support
Preliminary Support starts to show up after making a move to the downside with high volume and spreads widening. Buyers start to show up.
(SC) – Selling Climax
Preliminary Support fails, sentiment turns bearish and price action can be violent and volatile. Massive sell volume appears on the larger timeframes.
(AR) – Automatic Rally
Late sellers are caught off guard with a quick reversal as marked on the example chart above. This will determine upper range of the consolidation channel.
(ST) – Secondary Test.
Price action revisits support levels and may do so multiple times to establish it. IF THIS IS DONE ON LOW VOLUME THEN WE ARE GOOD.
(SPRING) The Spring.
This could be called multiple things: a shakeout, a bear trap, or a spring. Basically, after consolidating for some time a move to the occurs to mislead everyone the downtrend will continue. Buyers step in with MORE VOLUME and the price returns to it’s range.
(LPS, BU, SOS) – Last Point of Support, Back Up, and Sign of Strength.
None of these have to occur in order or at the same time but these moves are signs of the market switching over with the Bulls in control. Buy volume will increase and inexperienced traders will say it’s a “fake rally”.
As I mentioned, volume is one of the most important things one can monitor. At the beginning we had that high volume sell-off and since then it has been relatively low ON THE DAILY CHART.
Over the last month there have been multiple Bitcoin announcements regarding real world use-case by nation states. At first we were hit by the China FUD but then the President of El Salvador stepped in to make Bitcoin a currency. Since then, other smaller developing countries have considered doing the same.
While the price action doesn’t show it, this is great for the crypto community and after seeing how Bitcoin’s price recovered, I’m more comfortable showing this chart as it has checked off a few validation marks. The most important to me being the VOLUME ON THE DAILY.
This is not financial advice, just a hypothesis on a possible pattern that has not confirmed.
Wyckoff Accumulation Explained
(PS) –Preliminary Support
Preliminary Support starts to show up after making a move to the downside with high volume and spreads widening. Buyers start to show up.
(SC) – Selling Climax
Preliminary Support fails, sentiment turns bearish and price action can be violent and volatile. Massive sell volume appears on the larger timeframes.
(AR) – Automatic Rally
Late sellers are caught off guard with a quick reversal as marked on the example chart above. This will determine upper range of the consolidation channel.
(ST) – Secondary Test.
Price action revisits support levels and may do so multiple times to establish it. IF THIS IS DONE ON LOW VOLUME THEN WE ARE GOOD.
(SPRING) The Spring.
This could be called multiple things: a shakeout, a bear trap, or a spring. Basically, after consolidating for some time a move to the occurs to mislead everyone the downtrend will continue. Buyers step in with MORE VOLUME and the price returns to it’s range.
(LPS, BU, SOS) – Last Point of Support, Back Up, and Sign of Strength.
None of these have to occur in order or at the same time but these moves are signs of the market switching over with the Bulls in control. Buy volume will increase and inexperienced traders will say it’s a “fake rally”.
As I mentioned, volume is one of the most important things one can monitor. At the beginning we had that high volume sell-off and since then it has been relatively low ON THE DAILY CHART.
Comment:
I wasn't too far off
