Bitcoin’s Rounded Top [Wyckoff Distribution]: 5 Phases to Know

While we explore potential scenarios, including the possibility of Bitcoin heading down to $30,000 or even $25,000, these claims are speculative and should be considered hypothetical.

• Phase A: The market begins to show preliminary signs of selling pressure after an extended uptrend. This is the first hint that the balance of power is shifting from buyers to sellers.
  
  
• Phase B: The market enters a consolidation phase, moving sideways as large investors gradually distribute their positions.
  
  
• Phase C: A deceptive breakout, known as the Upthrust After Distribution (UTAD), occurs here, often trapping unsuspecting retail traders.
  
  
• Phase D: The onset of a decline, marked by clear Signs of Weakness (SOW), indicates that the distribution phase is nearing its end.
  
  
• Phase E: The final phase, where the market confirms the distribution and continues to fall, marking the completion of the process.
  

1. Buying Climax (BC) - $73,660
   This is the pinnacle of buying activity, where demand reaches its peak before supply starts to dominate. For Bitcoin, this level marked the highest point in the current cycle before a significant sell-off began.
   
   
2. Automatic Reaction (AR) - $60,795
   Following the Buying Climax, the market experienced an Automatic Reaction—a sharp drop as sellers stepped in. This level is critical as it signifies the start of the distribution process.
   
   
3. Upthrust (UT) - $71,180
   The Upthrust represents a rally that tests the resistance near the Buying Climax. However, it fails to sustain those levels, hinting that the market's upward momentum is weakening.
   
   
4. Upthrust After Distribution (UTAD) - $71,680
   The UTAD often serves as a bull trap, where the price makes a final push above the resistance only to quickly reverse. This move confirms that distribution is taking place.
   
   
5. Sign of Weakness (SOW) - $54,344
   After the UTAD, the market drops significantly, signaling a clear Sign of Weakness. This level demonstrates that sellers are gaining control, pushing the price to new lows.
   
   
6. Last Point of Supply 1 (LPSY 1) - $70,040
   The first Last Point of Supply (LPSY 1) is a weaker rally that fails to reach previous highs. This is a key indicator that the market's bullish momentum is fading, and distribution is nearing completion.
   
   
7. Last Point of Supply 2 (LPSY 2) - $65,105
   Currently, Bitcoin is in Phase E, at the LPSY 2 point. This level is crucial as it typically marks the final confirmation of distribution before a sustained downtrend.
   

• Lower Highs and Lower Lows: Expect the price to continue forming lower highs and lower lows, reinforcing the bearish trend.
  
  
• Volume Patterns: During this phase, volume analysis becomes critical. Look for decreasing volume on upswings and increasing volume on downswings, which confirms the presence of distribution.