BTC Playing the Wycoff Distribution

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Let me start off by linking a textbook example of Wycoff Distribution. Understand the phases and then move on to this Bitcoin chart.
Dropbox Screenshot: https://www.dropbox.com/s/pqv9i7nawi0eeq...
Article: http://tradingcoach.co.in/richard-wyckof...

The phases of distribution follow a rhythmic pattern.

After a major dump, smart money will accumulate a cheap asset, which causes a Buying Climax. Eventually smart money tries to liquidate their positions after the nice rally caused by their longs. This establishes the first resistance: Preliminary Resistance (Resistance 1 @ $10050).

Due to smart money cashing out on their longs, the market follows their lead and dumps as well in what is known as an "Automatic Selloff." This establishes the first major support: Support 1 @ $8650.

In this specific Bitcoin chart, there was a Secondary Test ( ST ) after the Automatic Selloff before the Upthrust (UT). Multiple ST's are common are smart money trades the range between Support 1 & Resistance 1. Each subsequent test of resistance tests the power of the bears.

As you all know, once you sell you've sold. The sellers will eventually run out, and the buying pressure will eventually crack through Resistance 1. This is known as the Upthrust (UT). Though sellers were shaken out at Resistance 1, there are plenty more at Resistance 2 @ $10450, so this upward momentum is halted by intense selling pressure. This is often a shakeout for retail investors who think Bitcoin will go to the moon from here on out.

Once the bears regain control at Resistance 2, and the price crashes, the market sentiment becomes bearish . At this point multiple tests of resistance have occurred and many buyers have bought and been wrong because of intense selling pressure. The market sees the resistance as an impenetrable ceiling, which creates longer term selling pressure; this reveals itself in the form of LOWER HIGHS.

I highlight this because this is likely the strongest evidence for Bitcoin being in distribution versus re-accumulation at this point. Volume and price are making lower highs, which is a significant indication of weakness.

Eventually the bulls lose faith in their Bitcoin Moon wetdream and stop buying; at which point the bears regain control and dump like the day after Thanksgiving. The price tears through Support 1 where the Buying Climax occurred, and even through Support 2 @ $8150 where the Automatic Selloff found support.

This is (obviously) a Sign of Weakness (SOW) and Bitcoin retests the lowest support from the range as resistance.

1. I am expecting Bitcoin to test Support 1 @ $8650 as resistance by roughly July 23rd, 2020
2. From there I will enter a short to Support 2 @ $8150 at least.
3. If Bitcoin follows a perfect Wycoff Distribution, then it will break below $8150 and dump to the next major support
4. The next major support, indicated by liquidity and price reversals, resides around $6600-6700.

I will see you all at the bottom.



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