RLinda ! BTCUSD -> Price in Phase C of Wyckoff Accumulation
Updated
Bitcoin has been in a narrow consolidation phase between the 0.5 Fibonacci level (16926) and the 0.618 Fibonacci level (16584) for the last few days. Before that, the price fell hard from a high of 18373 to a local low of 16293. The fall is based on fundamentals, mainly related to the US Fed press release
An interesting situation is forming on the daily chart, which strongly resembles the "Wyckoff Accumulation Phase", which is a period of sideways movement and range that occurs after a prolonged downtrend. This is the area where the bigger players try to build positions and shake out the smaller fish without causing a further price drop or the start of a new trend. They seek to maintain this phase until all of their positions are filled, hence the name "accumulation."
There are six distinct parts of the Wyckoff Accumulation Phase, each serving an important function: "Preliminary Support", "Sell Culmination", Automatic Rally, Secondary Test, Spring and finally, the last point of support, support and sign of strength.
The accumulation phase consists of six distinct parts, each with an important function. I have labeled these areas on the Bitcoin chart. Below are all the phases and labels for reference.
1 - Preliminary Support
Occurs after a prolonged move down and we begin to see signs of high volume and spread widening. We are also seeing the first signs that selling may be coming to an end once buyers start to show up.
2 - Selling Climax
This is where "Preliminary Support" fails, and the price begins to decline sharply. This is the phase of panic selling. At this point prices can go well above their norms and spreads can widen to the extremes. Often the price closes far from the low and the candlestick chart shows a very large wick.
3 - (AR) Auto Rally
This is the part where late sellers are punished. After the price has fallen sharply and selling pressure is no longer predominant, the buyers cause the price to reverse with almost the same level of intensity as the selling climax, but in the opposite direction. This is the result of short sellers closing positions. The maximum of this point will often define the extremum of the upper range for the subsequent consolidation.
4 - (ST in Phase B) - Secondary Test in Phase II
This is when price re-visits the lows of the structure, but in a much more controlled manner. Volume should not be increased by sellers. It is quite common to have multiple secondary tests.
5 - Spring
This is the point at which a hard test of the low suddenly occurs again to mislead participants into believing that the trend is resuming downward. It is essentially a shakeout. It should be noted that this movement is not always required. From here, the price should react by quickly regaining the lost previous structural level.
6 - (LPS, BU, SOS) The last point of support, support and a sign of strength
These subsequent patterns of behavior should be clear shifts in price action from prior activity to the beginning of the range. This is where price begins to rebuild the microstructural anchor points that were established earlier. Often a sign of strength can indeed occur just after spring. It will be a very quick and one-sided move, which means that buyers are in complete control. Volume near the end of the range should be high and lead to significant case coverage.
What follows that range is known as the markup. By then the case is done, and the market is often left chasing an upward move, resulting in a prolonged positive reaction. Ultimately, the purpose of this whole structure is to cause turmoil and confusion so that the bigger players can get bids from the smaller players.
One of the most important details in this exercise is the observed volume. We want to see a high volume sell-off at the beginning of the range followed by a return to low volume. Most importantly, after the spring and eventually through the SOS and markup, we should see that buying volume has a significant impact on price movement.
From a fundamental analysis point of view:
Bitcoin will presumably begin to behave more steadily and show hints of recovery only when the Fed moves to soften its policy.
From a technical analysis point of view:
Price is sandwiched between the 16926 and 16584 levels after a strong drop. A narrow consolidation and energy set in with false breakdowns of both consolidation boundaries is forming.
From a previous idea:
Bitcoin, after testing the resistance of the price channel and completing the formation of the fifth Elliott trend wave, moves into the ABC correction phase, in the format of this movement the price exits the channel down.
The price stops at the Fibo level of 0.618, which may be a signal for a pullback and start of formation of a new wave (the screenshot below will show the structure of the expected movement). If the bulls hold the level of 16584, the price may go up to the peak of correction B
I expect that after the pre-breakdown consolidation is completed, the price may break through the 16926 resistance and recover to the 17267 level
Regards to R. Linda!
The source of the accumulation information is the resources "StockCharts" and "WyckoffAnalytics"
An interesting situation is forming on the daily chart, which strongly resembles the "Wyckoff Accumulation Phase", which is a period of sideways movement and range that occurs after a prolonged downtrend. This is the area where the bigger players try to build positions and shake out the smaller fish without causing a further price drop or the start of a new trend. They seek to maintain this phase until all of their positions are filled, hence the name "accumulation."
There are six distinct parts of the Wyckoff Accumulation Phase, each serving an important function: "Preliminary Support", "Sell Culmination", Automatic Rally, Secondary Test, Spring and finally, the last point of support, support and sign of strength.
The accumulation phase consists of six distinct parts, each with an important function. I have labeled these areas on the Bitcoin chart. Below are all the phases and labels for reference.
1 - Preliminary Support
Occurs after a prolonged move down and we begin to see signs of high volume and spread widening. We are also seeing the first signs that selling may be coming to an end once buyers start to show up.
2 - Selling Climax
This is where "Preliminary Support" fails, and the price begins to decline sharply. This is the phase of panic selling. At this point prices can go well above their norms and spreads can widen to the extremes. Often the price closes far from the low and the candlestick chart shows a very large wick.
3 - (AR) Auto Rally
This is the part where late sellers are punished. After the price has fallen sharply and selling pressure is no longer predominant, the buyers cause the price to reverse with almost the same level of intensity as the selling climax, but in the opposite direction. This is the result of short sellers closing positions. The maximum of this point will often define the extremum of the upper range for the subsequent consolidation.
4 - (ST in Phase B) - Secondary Test in Phase II
This is when price re-visits the lows of the structure, but in a much more controlled manner. Volume should not be increased by sellers. It is quite common to have multiple secondary tests.
5 - Spring
This is the point at which a hard test of the low suddenly occurs again to mislead participants into believing that the trend is resuming downward. It is essentially a shakeout. It should be noted that this movement is not always required. From here, the price should react by quickly regaining the lost previous structural level.
6 - (LPS, BU, SOS) The last point of support, support and a sign of strength
These subsequent patterns of behavior should be clear shifts in price action from prior activity to the beginning of the range. This is where price begins to rebuild the microstructural anchor points that were established earlier. Often a sign of strength can indeed occur just after spring. It will be a very quick and one-sided move, which means that buyers are in complete control. Volume near the end of the range should be high and lead to significant case coverage.
What follows that range is known as the markup. By then the case is done, and the market is often left chasing an upward move, resulting in a prolonged positive reaction. Ultimately, the purpose of this whole structure is to cause turmoil and confusion so that the bigger players can get bids from the smaller players.
One of the most important details in this exercise is the observed volume. We want to see a high volume sell-off at the beginning of the range followed by a return to low volume. Most importantly, after the spring and eventually through the SOS and markup, we should see that buying volume has a significant impact on price movement.
From a fundamental analysis point of view:
Bitcoin will presumably begin to behave more steadily and show hints of recovery only when the Fed moves to soften its policy.
From a technical analysis point of view:
Price is sandwiched between the 16926 and 16584 levels after a strong drop. A narrow consolidation and energy set in with false breakdowns of both consolidation boundaries is forming.
From a previous idea:
Bitcoin, after testing the resistance of the price channel and completing the formation of the fifth Elliott trend wave, moves into the ABC correction phase, in the format of this movement the price exits the channel down.
The price stops at the Fibo level of 0.618, which may be a signal for a pullback and start of formation of a new wave (the screenshot below will show the structure of the expected movement). If the bulls hold the level of 16584, the price may go up to the peak of correction B
I expect that after the pre-breakdown consolidation is completed, the price may break through the 16926 resistance and recover to the 17267 level
Regards to R. Linda!
The source of the accumulation information is the resources "StockCharts" and "WyckoffAnalytics"
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Note
Bitcoin in the phase of narrow consolidation (ellipse)
The price is above the local support area, so we have to wait for the realization of growth to resistance (dotted line down)
But a breakdown of the support will send the price to 15600
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Join me, I'll guide you to PROFITABLE TRADING💵!
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