Bitcoin - Bottom with Wyckoff Method
Updated
Hi Traders, Investors and Speculators 📉📈
Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year.
With this chart, I propose my idea of a potential Bitcoin / BTCUSD / BTCUSDT bottom by using the Wyckoff Method . The Wyckoff Method can be extremely technical and complicated, with many phases, sub-phases, sub sub phases etc. The four main phases of the market cycle are accumulation, markup, distribution, and markdown. On this specific chart, we're taking a look at the accumulation cycle.
In this example, I'm pointing out all of the main phases with the turquoise anchor notes. You can scroll over them to see which phase it represents.
I used time cycles (at the top of the chart) as a mere point of reference, I am by no means claiming to know what will happen on which date. As I tried a few things, this time based cycle just so happens to fit well into the time frame that I have in mind for these phases.
Here are some terms and definitions you may find helpful when scrolling over the turquoise note anchors:
PS—preliminary support - where substantial buying begins to provide pronounced support after a prolonged down-move. Volume increases and price spread widens, signaling that the down-move may be approaching its end.
SC—selling climax - 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. Often price will close well off the low in a SC, reflecting the buying by these large interests.
AR—automatic rally - which occurs because intense selling pressure has greatly diminished. A wave of buying easily pushes prices up; this is further fueled by short covering. The high of this rally will help define the upper boundary of an accumulation TR.
ST—secondary test - 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. It is common to have multiple STs after a SC.
SOS - sign of strength, a price advance on increasing spread and relatively higher volume. Often a SOS takes place after a spring, validating the analyst’s interpretation of that prior action.
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. On some charts, there may be more than one LPS, despite the ostensibly singular precision of this term.
BU - “back-up”. This term is short-hand for a colorful metaphor coined by Robert Evans, one of the leading teachers of the Wyckoff method from the 1930s to the 1960s. Evans analogized the SOS to a “jump across the creek” of price resistance, and the “back up to the creek” represented both short-term profit-taking and a test for additional supply around the area of resistance. 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 TR at a higher level.
Furthermore, a brief look at the phases:
Phase A
Marks the stopping of the prior downtrend. Up to this point, supply has been dominant. Selling climax (SC) occurs here.
Phase B
Institutions and large professional interests are accumulating at relatively low-prices in anticipation of the next markup. The process of institutional accumulation may take a long time (sometimes a year or more) and involves purchasing at lower prices and checking advances in price with short sales.
Phase C
It is in Phase C that the 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 you've plotted the phases correctly, what should follow is the consistent dominance of demand over supply. This is evidenced by a pattern of advances (SOSs) on widening price spreads and increasing volume, as well as reactions (LPSs) on smaller spreads and diminished volumes.
Phase E
Price begins to behave bullish as demand is in full control and the markup is obvious to everyone. Setbacks, such as shakeouts and more typical reactions, are usually short-lived.
All of the above in mind, I believe we are currently trading in Phase B of the Wyckoff Method Accumulation phase. This means that we may still test support zone / resistance zone multiple times, until a clear bottom has been established. This, according to my analysis, could be around
12K, which has been a previous support zone during NOV/DEC 2020.
_________________
👀 Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 💎
👍Hit like & Follow 🔔
We thank you for your support !
CryptoCheck
Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year.
With this chart, I propose my idea of a potential Bitcoin / BTCUSD / BTCUSDT bottom by using the Wyckoff Method . The Wyckoff Method can be extremely technical and complicated, with many phases, sub-phases, sub sub phases etc. The four main phases of the market cycle are accumulation, markup, distribution, and markdown. On this specific chart, we're taking a look at the accumulation cycle.
In this example, I'm pointing out all of the main phases with the turquoise anchor notes. You can scroll over them to see which phase it represents.
I used time cycles (at the top of the chart) as a mere point of reference, I am by no means claiming to know what will happen on which date. As I tried a few things, this time based cycle just so happens to fit well into the time frame that I have in mind for these phases.
Here are some terms and definitions you may find helpful when scrolling over the turquoise note anchors:
PS—preliminary support - where substantial buying begins to provide pronounced support after a prolonged down-move. Volume increases and price spread widens, signaling that the down-move may be approaching its end.
SC—selling climax - 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. Often price will close well off the low in a SC, reflecting the buying by these large interests.
AR—automatic rally - which occurs because intense selling pressure has greatly diminished. A wave of buying easily pushes prices up; this is further fueled by short covering. The high of this rally will help define the upper boundary of an accumulation TR.
ST—secondary test - 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. It is common to have multiple STs after a SC.
SOS - sign of strength, a price advance on increasing spread and relatively higher volume. Often a SOS takes place after a spring, validating the analyst’s interpretation of that prior action.
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. On some charts, there may be more than one LPS, despite the ostensibly singular precision of this term.
BU - “back-up”. This term is short-hand for a colorful metaphor coined by Robert Evans, one of the leading teachers of the Wyckoff method from the 1930s to the 1960s. Evans analogized the SOS to a “jump across the creek” of price resistance, and the “back up to the creek” represented both short-term profit-taking and a test for additional supply around the area of resistance. 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 TR at a higher level.
Furthermore, a brief look at the phases:
Phase A
Marks the stopping of the prior downtrend. Up to this point, supply has been dominant. Selling climax (SC) occurs here.
Phase B
Institutions and large professional interests are accumulating at relatively low-prices in anticipation of the next markup. The process of institutional accumulation may take a long time (sometimes a year or more) and involves purchasing at lower prices and checking advances in price with short sales.
Phase C
It is in Phase C that the 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 you've plotted the phases correctly, what should follow is the consistent dominance of demand over supply. This is evidenced by a pattern of advances (SOSs) on widening price spreads and increasing volume, as well as reactions (LPSs) on smaller spreads and diminished volumes.
Phase E
Price begins to behave bullish as demand is in full control and the markup is obvious to everyone. Setbacks, such as shakeouts and more typical reactions, are usually short-lived.
All of the above in mind, I believe we are currently trading in Phase B of the Wyckoff Method Accumulation phase. This means that we may still test support zone / resistance zone multiple times, until a clear bottom has been established. This, according to my analysis, could be around
12K, which has been a previous support zone during NOV/DEC 2020._________________
👀 Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 💎
👍Hit like & Follow 🔔
We thank you for your support !
CryptoCheck
Note
Just drag the chart down if the muted technical indicator at the bottom is taking up empty space.
Discord Server
discord.gg/xHJRka3
Cryptocheck Website
thecryptocheck.com
SoftQuant Website
softquant.io
discord.gg/xHJRka3
Cryptocheck Website
thecryptocheck.com
SoftQuant Website
softquant.io
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.