Wyckoff Theory Predicts a May Breakout For Bitcoin
Wyckoff distribution theory states that there is a proportional effect for every cause in the market. Thus, after every accumulation phase, there is a markup, distribution, and finally a markdown phase. More specifically, each phase has its distinct characteristics
The current Bitcoin price movement closely resembles the Wyckoff accumulation phase, which occurs in five stages, outlined by the letters A through E. According to it, the Bitcoin price is currently in stage B, which will end with a high near $9500. Afterwards,
Phase A began with the "Selling Climax" on Oct. 24, 2019, which was immediately succeeded by the "Automatic Response'', in which the price reached a new high. These values serve to outline the support and resistance areas of the range, which are shown with dashed horizontal white lines.
In phase B, the price crated slightly lower lows in the "Secondary Test," which acted as a spring was followed by an increase that ended at the range highs. If the price continues following this accumulation pattern, it will continue to increase until it reaches a high at the $9,500 area, followed by a decrease that marks the beginning of phase C. The fact that the daily RSI is below 50 supports this possibility, especially if it gets rejected by the 50 line, which is looking likely.
In this phase, there are two possible outlines for the BTC movement, outlined by dashed and solid lines. The dashed outline is bearish, and the price will create a lower low, which is otherwise known as a spring. If the price gets there, it would provide the ABSOLUTE maximum return for investors.The solid line (more common) would create a higher low, otherwise known as the '' Last point of support''. The ensuing movement is the same, since the price is expected to reach a new high.
Stage D is characterised by the breakout, with the possible top above the range high being considered the "Show of Strength," while phase E takes the price to new territory, possibly aiming for the all-time high of $20,000.
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The current Bitcoin price movement closely resembles the Wyckoff accumulation phase, which occurs in five stages, outlined by the letters A through E. According to it, the Bitcoin price is currently in stage B, which will end with a high near $9500. Afterwards,
Phase A began with the "Selling Climax" on Oct. 24, 2019, which was immediately succeeded by the "Automatic Response'', in which the price reached a new high. These values serve to outline the support and resistance areas of the range, which are shown with dashed horizontal white lines.
In phase B, the price crated slightly lower lows in the "Secondary Test," which acted as a spring was followed by an increase that ended at the range highs. If the price continues following this accumulation pattern, it will continue to increase until it reaches a high at the $9,500 area, followed by a decrease that marks the beginning of phase C. The fact that the daily RSI is below 50 supports this possibility, especially if it gets rejected by the 50 line, which is looking likely.
In this phase, there are two possible outlines for the BTC movement, outlined by dashed and solid lines. The dashed outline is bearish, and the price will create a lower low, which is otherwise known as a spring. If the price gets there, it would provide the ABSOLUTE maximum return for investors.The solid line (more common) would create a higher low, otherwise known as the '' Last point of support''. The ensuing movement is the same, since the price is expected to reach a new high.
Stage D is characterised by the breakout, with the possible top above the range high being considered the "Show of Strength," while phase E takes the price to new territory, possibly aiming for the all-time high of $20,000.
If you like the analysis or have any questions, please press the like button or leave a comment, which will be answered in no time.
Happy trading everyone
Comment:
The C wave has likely begun faster than expected. BTC reached a high of $9241 and then decreased sharply to $8300.
This to me confirms that the C-wave is underway, with this first movement being its first subwave. The $8300 area is the middle of the range, so I am expecting some type of bounce here, before we head towards $7400.
Interesting to point out that the rejection of the RSI by 50 was extremely clean, occurring right at the top of the B-wave.
The C wave has likely begun faster than expected. BTC reached a high of $9241 and then decreased sharply to $8300.
This to me confirms that the C-wave is underway, with this first movement being its first subwave. The $8300 area is the middle of the range, so I am expecting some type of bounce here, before we head towards $7400.
Interesting to point out that the rejection of the RSI by 50 was extremely clean, occurring right at the top of the B-wave.
The Bitcoin price made a high at the 0.382 instead of the 0.5 Fib retracement level.
This does not confirm that we have completed the B wave and phase B. But, if this was indeed the top of the B-wave, I am expecting a right shoulder to form near $9000, follow
So, if we move above this right shoulder, I think the price will make another higher high at $9500 and move along the lines predicted by Wyckoff. If not, we could see a breakdown next week.