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BTC/USD Wyckoff market cycle formation and analysis

COINBASE:BTCUSD   Bitcoin / U.S. Dollar
BTC has recently become very hard to dissect, this is due to the lack of volatility . BTC has moved within a 10% trading range over the past month, failing to break above $10500 USD or below $8500 USD. A different type of trading method/outlook may be needed in order to see which direction BTC wants to move. Looking at BTC currently, it appears as though the Wyckoff market cycle may be applicable. It appears as though BTC is currently in the distribution area.

Chart description

  • PSY – Firstly, we find the BTC Preliminary Supply. This is where the volume expands after some larger market players begin to unload their BTC . However, this BTC is snapped up quickly due to high market interest.
  • BC - After the PSY, we saw a Buying Climax ( BC ). BCs often coincide with positive news or a positive event happening, which in this case was the BTC halving.
  • AR - After the BC , an Automatic Reaction has occurred, seeing BTC lose value due extreme demand allowing BTC to breathe. At the time an AR appears to be a healthy minor retracement.
  • UT - An Upwards Test has then happened shortly after the AR. This is an attempted breakout of the BC resistance level . However, due to the lack of buying power remaining and the decrease in BTC demand the UT fails to break above the resistance line set by the BC . This test then confirms the resistance level . In this instance, the BC was not reached to set a secondary resistance line.
  • SOW - Sign Of Weakness. The SOW tested the support level set by the AR and PSY. This confirmed that BTC was struggling to push further, that was the end of the impulsive move up, showing that BTCs huge gains week after week were coming to an end. The SOW increased the validation of the support line set by the AR and PSY.
  • UTAD - Upwards Thrust After Distribution (UTAD) was seen after the SOW. This move up was matched by a breakout of volume . However BTC could not consolidate and move up with these gains. Instead BTC saw a huge sell off the next day. From the UTAD it confirmed that BTC was stuck within a trading range.
  • SOW (2) - We have recently seen another SOW after an extended period of clear BTC weakness. BTC attempted to test the support lines again with multiple wicks, coincided by a decreasing volume , showing a growing lack of interest in BTC .
  • LPSY - Last Point of Supply (LPSY). This was a move by BTC after a break of the downwards trend line . Likely the final push up to prevent the incoming downwards movement and allowing for larger players to exit if they wish to.

BTC is looking bearish through the Wyckoff analysis and could make downwards moves within the coming days. BTC controls the cryptocurrency market currently with HUGE dominance over altcoins!

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