tanglebot
Short

Bitcoin Wyckoff Distribution Explained - Sorry, No Bull Rallies!

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
People who are expecting a Bull rally from here does not know about the Wyckoff Market Theory. As per the theory, after a super stock rally, the asset goes into a selloff and re-distribution. Which is a very healthy phase for a prolonged growth.

Now if you analyze the volume profile on a 1D chart, you can clearly see that the 6500 - 8500 is a high volume node and we can assume that the redistribution is happening in that zone. And the 50 EMA is a very strong resistance, even though it was pierced 2 days ago, the price came down due to heavy selling and very low demand.

Mostly in the coming days price will come down to 25 EMA which is 7500, if it is not holding, then price will go to the lower end of channel and then come again to test the 50 EMA . If 7500 is holding as a good support, then again we can see a rally to retest the 50 EMA .

This sideways movement within the channel can go for few days and the channel might get narrow also, but one thing which is confirmed is that we will be going down.

Below the channel, the 5500 is a very good support and also is a HVN (High volume node). Mostly it will hold support and we will have a rally again to retest the 50 EMA , from there it will fall to the next support level 4600 - 4800 which is also a HVN . This place is crucial, if we are not able hold support there, then we will have a free fall to the next HVN below, which is around 3600. There is no chance for price to go below that level.

From that bottom (4800 or 3600) we will start a fresh new journey for the next Rally, which will be the real Moon (2-3 years)

These will take place over large period of time, check the weekly chart to find the possible bottom.
Trade active: Seeing the support and low volumes around the 8100 drop, there is a possibility to have a small rally to around 8400 - 8500. Mostly the volume for the rally will be very less and also will have bearish RSI divergence. Best setup to short.
Comment: I have to correct Myself here. In the short term, there is a good chance to go upto 10k to 11k.

BTC is making a cup and handle. Read my analysis here

Comments

Nice accuracy bro.
+1 Reply
Nice call
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good analysis. Simple and intuitive :)
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@hkh222, Thanks man. It is important to know the bigger picture.
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Seeing the support and low volumes around the 8100 drop, there is a possibility to have a small rally to around 8400 - 8500. Mostly the volume for the rally will be very less and also will have bearish RSI divergence. Best setup to short.
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cI8DH tanglebot
@tanglebot, what do you think about this TA

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@hkh222, Its hard to believe the distribution happened at 11000 levels, that was like a bull trap. If you look at the weekly chart and weekly RSI, we still have room to go down. Only time will tell, but I think we will go down, not soon but in some days time. You can swing trade these times and by the time it bottoms out, you will have enough funds to buy 2-4 X BTC.
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cI8DH tanglebot
@tanglebot, Thanks for your reply.

I also think that it is more likely to go down than up.

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@hkh222, Hey, please read my revised analysis, in the short time BTC is bullish and can go to 11k.
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