Bitcoin - Technical Analysis
Dear Analysts and Traders,
Looking at the Bitcoin price chart, I notice a variety of structures described by Technical Analysis. My attention is particularly drawn to elements related to the Elliott and Wyckoff methodologies. The market appears chaotic yet orderly at the same time.
I must mention that I am not someone with formal education in this field. I am self-taught, placing a strong emphasis on using Technical Analysis as the main component of my decision-making process. This stems from my belief that although the chart is difficult to read, it largely allows for the interpretation of the hidden intentions of "smart money." I want to stress that the following words reflect only my personal point of view, which may not be correct, and that this publication is by no means investment or educational advice as understood by any law regulating such matters. I simply intend to ramble about topics I don’t fully understand.
Background
Bitcoin's price is in a long-term upward trend. Over the past year, there has been a strong upward trend within a broad sideways structure. Today, the price is near the upper boundary of this multi-year structure, and at the same time, at the lower limit of a smaller structure.
Technical Analysis
In my considerations, I will use elements of the Elliott, Wyckoff, and VSA methodologies.
I begin by applying the key elements of these methodologies to the price chart from recent months. Starting with Elliott's five-wave approach, I outline the trend that has brought the price to these levels, marking it as (12345). Next, I highlight the three-wave corrective patterns with a white (ABC), creating a complex correction structure.
I add events consistent with the Wyckoff method to the chart. Due to the complex nature of the studied structure, I decide to mark processes of varying scales. I do this with verbal descriptions in red and green, supplemented by horizontal lines indicating support and resistance. The structure described in red is the dominant one. I analyze the volume dynamics, marking them with dashed lines and a red loop.
Additionally, I pay attention to candlesticks, especially in the context of VSA and their specific meaning in key areas, such as extremes or events related to the methodologies used.
Interpretation and Thoughts
Without a doubt, Bitcoin’s price structure is both intriguing and complex. Looking at the most basic elements of the chart, I see strength, and at the peaks, I don't notice setups like Trap UpMove or Upthrust with volumes significantly deviating from the average. Instead, there are numerous Shakeout events, often followed by local volume peaks in its declining trend. This is different from the setup at the point I marked as Phase C. According to Wyckoff’s method, this is where the largest volume since the halt of the uptrend has appeared. The Green Upthrust is particularly interesting. As part of a smaller structure, which I believe to be accumulative, it indicates No Demand. Of course, this is a sign of weakness, but what matters to me is the background, where significant potential distribution is evident, with signs of weakness seen through multiple breaches of the lower part of the trading range. I could treat this situation as Phase C, but of a distribution phase. However, I believe there is no overwhelming supply here, and in the actions of the Composite Man, I would expect an attempt to lead the crowd to the highest possible regions, trap them, and guide them to the inevitable. Here, the rhetoric is different—the market appears weak, but the area around Preliminary Supply has been strongly defended by the bulls.
From an Elliott perspective, I see a complex correction, and I believe it is a triple three, consisting of a flat correction, a three, and a zigzag. The end of this series of corrections, in my opinion, begins Phase C of the highest-order accumulation in this area of the chart. Supporting the thesis of an accumulation process is the volume, which follows a characteristic pattern: huge volumes at the halt, followed by a steady decline in Phase B, particularly during the descent from the peak of the Red Upthrust. The test of Phase C is abrupt, and the price once again forms a smaller structure. Here, I expect a test to appear, especially on a higher timeframe, confirming No Supply. For now, despite the chart’s grim appearance, I see more of a transfer of assets from the crowd rather than an attempt to push the price significantly lower.
The Bitcoin price chart presents a beautiful structure from a Technical Analysis perspective. I believe there is much more to be uncovered. I think my reflections on these price movements provide a basis to claim that an accumulation process is underway. Soon, confirmation of the lack of selling pressure will likely emerge—if I am interpreting the market correctly. The smaller Green Structure is a kind of retest that could evolve into a Turning Point.
Soon, the market will reveal whether my assumptions are correct and make clearer that which allows for easy analysis... after the fact!
Thank you all for taking the time to read my thoughts. I wish you successful analyses and winning positions!
CatTheTrader
Looking at the Bitcoin price chart, I notice a variety of structures described by Technical Analysis. My attention is particularly drawn to elements related to the Elliott and Wyckoff methodologies. The market appears chaotic yet orderly at the same time.
I must mention that I am not someone with formal education in this field. I am self-taught, placing a strong emphasis on using Technical Analysis as the main component of my decision-making process. This stems from my belief that although the chart is difficult to read, it largely allows for the interpretation of the hidden intentions of "smart money." I want to stress that the following words reflect only my personal point of view, which may not be correct, and that this publication is by no means investment or educational advice as understood by any law regulating such matters. I simply intend to ramble about topics I don’t fully understand.
Background
Bitcoin's price is in a long-term upward trend. Over the past year, there has been a strong upward trend within a broad sideways structure. Today, the price is near the upper boundary of this multi-year structure, and at the same time, at the lower limit of a smaller structure.
Technical Analysis
In my considerations, I will use elements of the Elliott, Wyckoff, and VSA methodologies.
I begin by applying the key elements of these methodologies to the price chart from recent months. Starting with Elliott's five-wave approach, I outline the trend that has brought the price to these levels, marking it as (12345). Next, I highlight the three-wave corrective patterns with a white (ABC), creating a complex correction structure.
I add events consistent with the Wyckoff method to the chart. Due to the complex nature of the studied structure, I decide to mark processes of varying scales. I do this with verbal descriptions in red and green, supplemented by horizontal lines indicating support and resistance. The structure described in red is the dominant one. I analyze the volume dynamics, marking them with dashed lines and a red loop.
Additionally, I pay attention to candlesticks, especially in the context of VSA and their specific meaning in key areas, such as extremes or events related to the methodologies used.
Interpretation and Thoughts
Without a doubt, Bitcoin’s price structure is both intriguing and complex. Looking at the most basic elements of the chart, I see strength, and at the peaks, I don't notice setups like Trap UpMove or Upthrust with volumes significantly deviating from the average. Instead, there are numerous Shakeout events, often followed by local volume peaks in its declining trend. This is different from the setup at the point I marked as Phase C. According to Wyckoff’s method, this is where the largest volume since the halt of the uptrend has appeared. The Green Upthrust is particularly interesting. As part of a smaller structure, which I believe to be accumulative, it indicates No Demand. Of course, this is a sign of weakness, but what matters to me is the background, where significant potential distribution is evident, with signs of weakness seen through multiple breaches of the lower part of the trading range. I could treat this situation as Phase C, but of a distribution phase. However, I believe there is no overwhelming supply here, and in the actions of the Composite Man, I would expect an attempt to lead the crowd to the highest possible regions, trap them, and guide them to the inevitable. Here, the rhetoric is different—the market appears weak, but the area around Preliminary Supply has been strongly defended by the bulls.
From an Elliott perspective, I see a complex correction, and I believe it is a triple three, consisting of a flat correction, a three, and a zigzag. The end of this series of corrections, in my opinion, begins Phase C of the highest-order accumulation in this area of the chart. Supporting the thesis of an accumulation process is the volume, which follows a characteristic pattern: huge volumes at the halt, followed by a steady decline in Phase B, particularly during the descent from the peak of the Red Upthrust. The test of Phase C is abrupt, and the price once again forms a smaller structure. Here, I expect a test to appear, especially on a higher timeframe, confirming No Supply. For now, despite the chart’s grim appearance, I see more of a transfer of assets from the crowd rather than an attempt to push the price significantly lower.
The Bitcoin price chart presents a beautiful structure from a Technical Analysis perspective. I believe there is much more to be uncovered. I think my reflections on these price movements provide a basis to claim that an accumulation process is underway. Soon, confirmation of the lack of selling pressure will likely emerge—if I am interpreting the market correctly. The smaller Green Structure is a kind of retest that could evolve into a Turning Point.
Soon, the market will reveal whether my assumptions are correct and make clearer that which allows for easy analysis... after the fact!
Thank you all for taking the time to read my thoughts. I wish you successful analyses and winning positions!
CatTheTrader
Note
Note
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