This was the very beginning and the initial phase of the whole cycle since the 2019 top was marked at the 13.700 bitcoin moved on with selling pressure as institutions taking profit and supply entered the market also from past price action. This supply entering the market converted into a PS where inexperienced traders entering the market assuming the bull-rally is still going on and providing a smaller rally to test remaining resistance where big institutions initiating there short-positions in anticipation of more bearishness to come, this mechanism ending into an SC (selling climax) where heavy selling occurs to push the price below support in this mechanism public is going to hear of that there can be a reversal but its still not the time where everybody is selling. After this comes the AR (automatic rally) pushing the price some higher as there is still demand in the market from uninformed traders which will not last long as supply is stronger in this range pushing price lower again and still smart-money institutions who entering their short-sells in these levels in order to trap the bunch of retailers in the market.
In this phase, the cause of a new uptrend is built where there enters selling pressure into the surface and large interests begin to sell their values and short-sell the market, this plays out into a secondary test in phase B ( ST ) where price pushes below the established support points and forms new lows in increased and momentum meaning that much of the public is selling, this can cause several smaller rallies to the upside which seem strong but can not hold sustainable to form another new uptrend which will last. There can be more than one secondary tests in this phase which bitcoin has shown to us as you can watch marked in my chart with two rallies to the upside which did not last and confirmed to the downside again as high public selling occurs. All this playing into institutional interest as they are profiting of short-selling while waiting on the other end to accumulate new values in order to participate when the public is ripe, in such phases it is important to be prepared on the fake-rallies as they assume that the downtrend is over while accumulation is still going on and there is more to come.
Bitcoin has shown exceptionally to the downside this year as corona hit all global markets and provided big selling pressures this was especially devastating in the cryptocurrency space as it has normally a high of these events even more increased it which also confirming to the accumulation Wyckoff-structure going on in bitcoin these times where the heavy corona breakdowns also matched with other factors showing heavy selling pressure in a averagely short period of time and provided the spring which was intrinsically significant for the upthrust and recovery which followed, this spring where it was not hard to profit out of a short-sell and accumulation of new values provided the bottom in phase C and moved on to test the structure in order to move on. In this phase, smart-money is deciding either the price can be marked up or more downside can be initiated, this mark-up happened as many people where trapped and the bottom where confirmed at almost 4000 USD which was also a heavily oversold condition in bitcoin compared to past oversold conditions in bitcoin historical movements.
Here it gets really interesting because this phase will move on to finally confirm important points and is actually good for positioning in the market as rallies follow with the sign of strengths (SOS) and last points of support where the price lacks significant selling pressure as demand is higher converted over supply and now not only smart-money enters but also public in participation, also what was confirming the structure was the consolidation below the 10.000 USD psychological resistance while it was still possible to fail on this resistance bitcoin backed-up to form this decisive Sign Of Strength Above the important resistance which was the needed factor in order to confirm the further movement and Wyckoff-price-action, now we can watch that bitcoin will form a back-up and new last points of supply where it will test the support levels and has a high possibility to confirm them properly as this is also playing into the dynamic of the wyckoffian-cycle. As you can watch also the support of the back-up is matching with the resistance of past price-action in phase A.
The back-ups and last-points-of-support which lead to newer highs in phase D building up the fundamental groundstone to finally confirm into phase E where higher rallies will show up as crucial demand is increasing where smart-money already accumulated and there are news traders and retailers rushing into providing a new paradigm in price till this phase is stopping, this phase will come when bitcoin has successfully developed the re-accumulation provided by the back-up and last-point-of-support it is currently building. This phase also finally ends up the whole wyckoff-market-accumulation bitcoin has shown over the last weeks and months and therefore it can confirm the uprisings till a new cycle sets in which will be either a re-accumulation cycle or a distribution cycle that will alter the whole dynamic in a new light but till then the phase E can be in expectancy.
Now we can watch that bitcoin is just in a strong and established cycle which will highly likely confirm into the next mechanisms and phases into the subsequent months and weeks to come. The move above the important resistance was an important step in order to conform to the upcoming phases and show how bitcoin will proceed, the contiguous times will be highly interesting and it should not be kept aside that there can be highly profitable volatile times ahead while bitcoin isnt the one which it was five years ago as the magnificence has changed there can be more ups and downs in future which is good for traders hedging into the market but it should be noted that the high volatile movements should not be kept to the light shoulder as the tricky price-movements in accumulation phases like these can be highly dicey for traders, in this case, it is important to be attended for the right line up within the market in expectation to a new re-accumulation or distribution cycle enters the surface as the possibility is given that bitcoin shows again these peaks and valleys it has developed in the habitual price-actions.
In this manner, thank you for watching, support for more market insight and have a good day!
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Information provided is only educational and should not be used to take action in the markets