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Home Cryptocurrency news Bitcoin

Wyckoff Logic Suggests Bitcoin Markdown Has Only Just Begun

Tony Spilotro by Tony Spilotro
1 year ago
in Bitcoin, Cryptocurrency news
Reading Time: 2min read
bitcoin wyckoff crypto
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At the end of September 2019, Bitcoin broke down from a triangle pattern that it had been trading in throughout the summer months, putting an end to a rally that first began in the Spring.

The entire cycle from Bitcoin’s bear market bottom all the way to the recent top, appear to follow Wyckoff’s distribution model. And if that’s what is playing out in Bitcoin markets, the markdown phase of the first-ever crypto asset may have only just gotten started, and much lower prices may be ahead.

Bitcoin in 2019: The Perfect Example of the Wyckoff Method?

Richard Wyckoff was a world-renowned stock trader and author of a number of famous trading books. His success was based on the principle that markets were cyclical and went through four distinct phases at different times.

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The four different phases according to the Wyckoff method, are accumulation, markup, distribution, and markdown.

Related Reading | More Whales Are Hoarding Bitcoin After Accumulating During Bear Market

Accumulation phases are periods of time when an asset’s price is at a low following a bear market or downtrend, and smart money begins buying up the asset at the low prices. After the investors have sufficiently accumulated a large position of the asset, the markup phase begins, driving up the price of the asset to later be sold at a higher price.

The accumulation phase took place while Bitcoin was trading in the low $3,000 and $4,000 range, at the end of 2018 and into early 2019. The markup phase was the subsequent rally from those lows to a local high of $14,000.

At the recent peak from the bottom, would have represented over 350% gains for investors who bought Bitcoin at its bear market low and then sold the June top.

Markdown Phase Could Take Price of Leading Crypto To New Lows

After accumulation and markup, comes distribution and markdown.

Once Bitcoin reached $14,000 distribution began, and Bitcoin began to consolidate as the initial supply being sold was met with continued demand. Eventually, the distribution caused supply to outweigh demand, and prices began to fall.

Here is another Wyckoff Logic pic.twitter.com/WszntfYScl

— Moe (@Moe_mentum_) October 12, 2019

According to Wyckoff method, after distribution comes the markdown phase, when the price of the asset begins to decline and bears regain control over the market.

Related Reading | Crypto Analyst: Bitcoin Continues To Follow Bear Market Bottom Fractal 

If the leading crypto asset by market cap is indeed in a markdown phase, as the chart structure appears to suggest, the price of Bitcoin could continue to be pushed down further and further until the price is sufficiently suppressed enough for high wealth investors to begin accumulating once again, restarting the entire process.

And if Bitcoin has entered a markdown phase, 2019 serves as a near-flawless example of a full cycle according to the Wyckoff method playing out in a market.

Tags: bitcoincryptodistributionrickard wyckoffWyckoff Method
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a digital media executive and global remote work leader with a decade of content experience and excellent. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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