The Wyckoff Accumulation: Why Is Bitcoin at a Critical Level According to the Model?

In the chart below, BTC’s price fell to as low as 31,000, but with less volume than the previous nosedives, which is a positive signal and can indicate early signs of supply exhaustion. The price then rallies back up to continue the trading range.


Phase C – Spring and Test
This phase is where larger players intentionally sell to sharply drive down the price, pushing weak hands to act in panic and dispose of their assets at low prices.

Usually, the traders will briefly drive prices below the trading range and send them back up as they start buying substantial supply amounts.

During the Spring, the price falls, but not as much as the Selling Climax (phase A). More importantly, volume spikes, showing that large players are heavily accumulating and absorbing supply.

Spring, Phase C
The Test comes after the Spring, where large players ‘test’ the market for supply. Price is then pushed down to the lower part of the trading range to gauge supply on the market. If the price drops with less volume and support holds – this can be seen as a positive signal of further supply exhaustion.

Test, Phase C
Regarding Bitcoin, it formed the Test at a low of $30,100 (June 26th), followed by less volume than the Spring, and as can be seen below – held support and pushed higher.

After forming the Test at $30,100, BTC spiked further north to make a short-term Higher High at $36,600 (June 29th). The cryptocurrency then saw a short-term pullback and formed a Higher Low at $32,700 (July 1st-2nd).  This pullback was followed by less aggregated volume, signaling supply exhaustion.

At the time of writing, according to the definition of each Wyckoff Phase and Principles explained, BTC appears to be in the latter half of Phase C.

This is a critical point in BTC’s consolidation as the price must hold support at $30.1K, the low of the Test.

Phase D and E
The next phases will be reached once the larger players have determined supply has been exhausted after a series of Tests.

The signal is declining volume throughout the trading range and particularly decreasing volume with each pullback. If BTC can push above $36,600, then the current structure will require BTC to rally up to $40,000 and then have a short-term pullback to form the Last Point of Support. After that, it will start another strong rally aiming at $43,000, consolidate, and then go significantly higher.

Risks and How this Structure can be Invalidated
There is no such thing as 100% certainty in the markets, and especially in on-chain analysis. In general, it comes down to probabilities.

If BTC makes a daily close below the near-term higher low at $32,700, the short-term downside risk will increase. The current Test at $30,100 from June 26th is the critical level to watch.

A Higher Low, in this case, is defined as a pullback to any level above $30,100. Some view the recent sell-off to $28,800 (June 22nd) as the Secondary Test in Phase B, which is possible, but it will require BTC to drop below $28,800 to validate that call.


Bullish Technicals and On-chain
The technicals are showing bullish divergence on the daily chart, with momentum slowly trending higher. Key Moving Averages are flattening, with volume decreasing within each pullback.

This makes the perfect setup favorable for a breakout to the upside. Notably, on-chain metrics remain very bullish, showing strong net outflows from exchanges.

The latter indicates substantial accumulation by long-term holders, low funding rate, low stablecoin supply ratio, increasing open interest, and robust network user growth.

On-chain analysis has also confirmed an uptick in BTC whale activity, with an increase of 60,000 BTC purchased in one day to start July. These are all positive signals for BTC.

BTC appears to be following the Wyckoff Accumulation Schematic and has shown precise price action for each phase by definition. If it holds $32,700 on the daily and pushes above $36,600 to form another Higher High, this will be a very bullish signal.

If BTC fails to hold the Higher Low at $32,700, the risk of an extension of the Wyckoff Accumulation and lower prices will increase. With bullish technicals, bullish on-chain analysis, and price action accurately following the Wyckoff Accumulation, the probabilities favor the bulls.

Sourse: cryptopotato.com

Start mining bitcoin now

Start trading bitcoin now

Category: News | Views: 114 | Added by: danyagames2007 | Tags: #Bitcoin #Bitcoin Price #BTC | Rating: 1.0/1
Total comments: 0
Name *:
Email *:
Code *:
The Bitcoin cycle will last 1,000 days, one analyst says, as crypto rallies despite 40% volume drop (5)
This Country Could Make Bitcoin a Legal Tender After El Salvador (0)
Bitcoin Market State: Investors Holding Steady Instead of Selling Large Volumes like 2018, But Volatility to Remain Under Pressure until Q3 (0)
Apple Co-Founder Steve Wozniak Calls Bitcoin a "Miracle," Says It's Better Than Gold (0)
We must stop bitcoin before it's too late (0)
Bitcoin price under pressure as regulatory concerns mount (0)
In First, Israeli Authorities Seize Digital Wallets Containing Bitcoin and Other Cryptocurrencies Destined for Hamas (0)
The Wyckoff Accumulation: Why Is Bitcoin at a Critical Level According to the Model? (0)
When Will Bitcoin Rally Again? (0)
Elon Musk Receives Amusing Request to Start Pumping Bitcoin Again But He Says "No" (0)