Why is BTC crashing?: Wyckoff Accumulation

Despite the overall bullish sentiment of the market, the Bitcoin price has been crashing in the past couple of days. This bull run has been very different from previous cycles.

On one hand, the macro aspects of the economy in general are different this time. The world is undergoing through a period of econmical uncertainty due to the pandemic as well as soaring inflation. On the other, the players involved this time are different too. Big institutions, crypto whales and billionaires have been actively accumulating BTC and shaping the price. One of the main strategies to do this is called a “Wyckoff Accumulation”.

The Wyckoff Accumulation Schematic was invented by Richard Wyckoff, a pioneer in Technical Analysis of the 20th centry.

Wyckoff explianed that all the fluctuations in the market, should be studied as if they were a result of one man’s operations and that the “Composite Man” sits behind the scenes and manipulates the market to people disadvatage in order to take profit. However, if you understand the game he plays, you can also enjoy great profits.

“If one understands the market behavior of the Composite Man, one can identify many tarding and investment oportunities early enough to profit from them.”

All the price fluctuations we have been experiencing in the Bitcoin market have been manipulated by big intrests. So this is how it goes…

The “Compisite Man” pumps the price using a Wyckoff Distribution Schematic, then he sells and collects profits. Afterwards, he dumps the price using a Wyckoff Accumulation Schematic so that he can rebuy back his position at a cheaper price and get more coins.

Right now we are expeirncing a Wyckoff Accumulation Schematic in which large intrests absorb all the supply in the market before a big pump in price.

According to the Wyckoff Accumulation Schematic, a drop in price is manipulated by an institution that is building a position in an asset before the price increases. I think we just experiences a Wyckoff Distribution during October and November and now we are entering a Wyckoff Accumulation phase.

A Wyckoff Accumulation phase has different stages: 1. first we experience a dramatic drop in price (selling Climax, 2. followed by a jump or recovery in price (Automatic Rally). This is followed by again, 3. a decrease in price (Second Test). Next, 4. another rally takes place and price increases, then another 5. Second Test that can drop the price lower than Selling Climax, and a spring. 6. The spring is the lowest price level during this schematic, however, not every Wyckoff Accumulation has one. After this last dump, comes a recovery that is characterized by 7. A last test around the resistance levels and a 8. Sign of Strength, above the resistance level that signals the bear is over.

WHAT TO EXPECT IN THE NEXT WEEKS…

The support level was set by the selling climax (SC) at 41k, so we can expect the second test (ST) and spring to be below this level. The resistance level was set by the automatic rally(AR) at 52k, so we can expect a pump around this level and the sign of strength(SOS) above this price that would indicate the bear is over.

This is not the first time these schematics have been applied to the Bitcoin market. Back in March-June 2021 this same trick played out.

The past Wyckoff Distribution that took place in May took 96 days to play out, this time it took 51 days, the time frame was almost cut in half. The past Wyckoff Accumulation took 72 days to play out before the price started to recover. If we follow the logic that this time the time frame will be cut in half, this will mean that it can take up to 36 days for the accumulation to take place (around January 5th).

In addition, in the past Wyckoff Distribution and Accumulation Schematic, the distribution support level (at 48k) wasthe next sign of strength during the accumulation phase that followed. If this is accurate, this means that the next sign of strength for this accumulation period should be at 58k (this was the support level for the recent distribution).

So, we can expect the proce to keep oscilating between 55k and 41k, however it can still go under since we are missing the Second Test/Spring event. With that being said I am still very bullish on BTC. So keep HODLing and don't panic sell! Remember, we are still in a bull run market!!

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Why is BTC crashing?: Wyckoff Accumulation

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Mariana Leyva