July 27

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Bitcoin Bottom? Wyckoff Accumulation Theory

Cryptospace

After a dreaded few days below $30,000, Bitcoin made one of it’s biggest daily price moves in its history. In one day alone the price increased by 12%, liquidating Bitcoin shorts and leaving nonbelievers in the dust. Now, Bitcoin has finally recaptured $40,00 after a $10,000 price increase in only a few days.

The Wyckoff method is a series of sideways actions that follow a particular pattern in order for investors and traders to make decisions. There are two different types of Wyckoff methods typically; accumulation and distribution.

Distribution happens when the charts range sideways then eventually go towards the downside, whereas accumulation happens when the price ranges sideways then goes towards the upside. What causes these price movements is typically basic market psychology and supply versus demand — along with institutional market manipulations.

Technical analysis isn’t for everyone, however, after comparing the theories with the recent price action in the past few months, it’s playing out exactly as predicted in both scenarios. 

Wyckoff Distribution

Many analysts and long term holders are watching Bitcoin follow the exact Wyckoff pattern that it followed perfectly during the move to the downside.

Technical analysts warned people as Bitcoin was following the Wyckoff distribution and what they predicted, played out exactly right.

Below is the Wyckoff distribution versus the Bitcoin 4 hour chart and how they compare.

Source: Yahoo Finance.

As you can see, the Bitcoin chart followed the pattern to a tee and made a massive move to the downside in May. Although many people believe it was due to Elon Musk, it is hard to believe one man would have such an impact on the market.

Wyckoff Accumulation

With all markets, there is eventually an upside following a downside. For Bitcoin, many people believed it would trend sideways before going back to the upside. Although we aren’t in the clear yet, the massive rally we have seen has been following the Wyckoff Accumulation pattern on the same chart that it followed the distribution pattern on.

This gives many holders a glimmer of hope as the chart had predicted, a few months sideways before a massive rally. Although the price only wicked down in a few of these “lows” on the chart, it still followed it exactly as predicted.

Below you can see where we are exactly in comparison to the Wyckoff Accumulation pattern if we are in fact following it.

Next Steps for Investors

Of course, investors worldwide hope for this to be true and Bitcoin to blast off towards $100,000 in this bull run. According to the accumulation method, we could see a few more weeks to a bit over a month longer of sideways action before a return to higher price levels.

Investors who have been watching the Wyckoff Accumulation pattern play out had been waiting for spring to happen as a possible entry point. When looking at the volume before the $30,000 level, the buy volume definitely showed how many people had set $29,000 as an entry point.

After a 17% increase in just 5 days, it appears that Bitcoin is on the move to the upside and we may never see below $30,000 again.

We could potentially see one more small correction before we move towards $40,000 if this does play out as predicted. Many investors are getting ready to fill their bags for the last time and ride out of the rest of this bull run.

Open a hassle-free account with Cryptospace and buy your favorite cryptocurrency before it’s too late. As we know, other smaller cap coins such as Ethereum, Litecoin, and Bitcoin Cash follow the steps of the dominant Bitcoin.


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