Bitcoin Re-Accumulation

I have been asked about Bitcoin a fair amount in recent weeks. My first investment in Bitcoin was around $11, If I am honest I wish I had held on to them (not worth thinking about) But back then the Technology was interesting and the investment was worth a shot. Obviously, it paid off and an early exit was regretted.

In 2017 our company started investing in Blockchain Technologies for the financial sector - so we are a believer in the underlying tech in general.

After the first hype - we felt that the crypto market (different to the blockchain) as in, coins with no real driver or purpose were popping up with the sole intention of a big ICO and exit stage left. The crash actually helped the market overall by shaking out the rubbish (a lot of it) and paved the way for more institutional focus. In doing this, the transition from the cool kids to the professional investors is where we are currently at.

As a trader of stocks for 20 something years now, I have been fortunate enough to also be involved in direct company investments and from seeing both sides, you can paint a clear picture.

Re-Accumulation takes place after early adoptors take profits this causing a knee-jerk reaction and the price to drop down a fair percentage without easing up. I read that after the $40,000 high the drop wiped $170Bn off Bitcoin's value in 24 hours. So I would class this as the "Reaction". You then will see a market manipulation take place, designed to fool traders into a belief the drop was the pullback and long it will continue. Before another fair size drop (caused by decent selling - profit-making of coins only acquired days ago on the first drop price).

Once a quick buck is made, the professional trader will push volume in the other direction lower than the low of the first reaction. Think about it logically for a second, at this stage you have new players new to trading, new to tech. Jumping on the bandwagon trying to make a fast retirment pot. If the price creates a lower low, retail traders are shown "this is a down-trend" maybe it was a bubble - Again fear setting in.

Once the Price has come back below *Fair market value - the accumulation will continue until enough coins have been accumulated and the real rise comes. Sending the price up and above the last highs and into new territory.

Here's a couple of screens in mostly in smaller timeframes to show examples of what is going on.

This above shows the concept mentioned of manipulation after the buying climax.

These are some potential scenarios based on the shakeout logic.

Fair Market value levels.

Accumulation indicator widening.

Trend momentum in the smaller timeframe & key levels.

This shows the contractions of the trend near the top - creating a range now for Accumulation.

Volume movement slowing toward the top and a steady drop down to the value area lows. Not to scare people too much, whilst collecting coins.

ATR Drop confirming volume decreasing slowly in the Accumulation.

I hope this helps - please feel free to ask questions, comment, and like below.

Have a great weekend.



Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.

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