Bitcoin: Wyckoff Accumulation Schematic Analysis 1H (May 13)

X Force Global Analysis:


In this analysis, we assume a probable bullish case for Bitcoin, approaching the market short term from the wyckoff accumulation schematic.

Wyckoff Accumulation Schematic Explained

- PS (preliminary support): This is where substantial buying begins to provide pronounced support after a prolonged down-move.
- SC (selling climax) : This is the point at which widening spread and selling pressure usually climaxes and heavy or panicky selling by the public is being absorbed by larger professional interests at or near a bottom.
- AR (automatic rally): This occurs because intense selling pressure has greatly diminished. A wave of buying easily pushes prices up; this is further fueled by short covering.
- ST (secondary test): This is the point in which price revisits the area of the SC to test the supply/demand balance at these levels. If a bottom is to be confirmed, volume and price spread should be significantly diminished as the market approaches support in the area of the SC.
- SOS (sign of strength): A price advance on increasing spread and relatively higher volume.
- LPS (last point of support): The low point of a reaction or pullback after a SOS. Backing up to an LPS means a pullback to support that was formerly resistance, on diminished spread and volume.
- BU (back-up): A back-up is a common structural element preceding a more substantial price mark-up, and can take on a variety of forms, including a simple pullback or a new trading range at a higher level.

- Phase A: Phase A marks the stopping of the prior downtrend.
- Phase B: In Wyckoffian analysis, Phase B serves the function of “building a cause” for a new uptrend. Institutions and large professional interests are accumulating relatively low-priced inventory in anticipation of the next markup
- Phase C: It is in Phase C that Bitcoin's price goes through a decisive test of the remaining supply, allowing the “smart money” operators to ascertain whether the stock is ready to be marked up.
- Phase D: If we are correct in our analysis, what should follow is the consistent dominance of demand over supply.
- Phase E: In Phase E, Bitcoin leaves the trading range, and demand is in full control with the markup obvious to everyone


Market Sentiment:

Long short ratios are at 65 to 35. While this is a small decrease in long positions from 70 to 30, this demonstrates that the bullish sentiment is still dominantly higher. Combining this to the Wyckoff Accumulation Schematic, it could be said that the demand is too high, while we are still at a relatively beginning phase of the accumulation.

What We Believe

Despite the potentially bullish case for Bitcoin, from the perspective of Wyckoff Accumulation Schematics, we believe that probabilities for further downtrend remains relatively high. A probable case accommodating both scenarios could involve a case where Bitcoin accumulates in current ranges to test 10K levels again for a double top, before showing further corrective moves.

Trade Safe.