CRYPTO - BTC - The Wyckoff Method #2
Updated
Wyckoff Method Application:
Hello everyone, I spotted another great application for the Wyckoff Method, this time using Distribution Schematic #2. I caution bulls, as I believe that we are at the end of an exuberance phase and now Reward and Risk have inverted for Longs! I personally think that the price can go sub 10k very quickly, and 20k~ is a likely bottom. Trade with care...
But without further ado, Here we go!
5 Step Approach to the Market:
1. Determine the present position and probable future trend of the market.
- Currently swinging bearish, and I believe I have determined the whale operating on this market's trade setup:
2. Select stocks in harmony with the trend.
- Bitcoin is a leading indicator for the crypto market, but it is led by investors' risk appetite. I am bearish on the market, and I believe that US10Y yields will hit 2% again in the nearest future (which inverts the market, and consequently, the crypto market):
- My previous Wyckoff Idea (RIOT) being validated to TP1 gives me further confidence in my logic tree of assumption, and gives me the conviction to add to short positions on the previously powerful bull market:
3. Select stocks with a “cause” that equals or exceeds your minimum objective.
- I have high conviction that (a) BTC has ended its uptrend and is currently in a distribution phase, and (b) I speculate that the macro trend is about to reverse.
- My minimum objective is to use BTC as a leading indicator for crypto related instruments.
DXY:
4. Determine the stocks' readiness to move.
- TA shows that the stock is ready for a move to the downside (I won't be sharing all of my tells).
5. Time your commitment with a turn in the stock market index.
- I have high conviction that the stock market index will also see downside in the nearest future:
Three Wyckoff Laws:
1. The law of supply and demand determines the price direction.
2. The law of cause and effect.
3. The law of effort.
Analyses of Trading Ranges:
- Trading ranges ( TRs ) are places where the previous trend (up or down) has been halted and there is relative equilibrium between supply and demand . Institutions and other large professional interests prepare for their next bull (or bear) campaign as they accumulate (or distribute) shares within the TR .
Wyckoff Schematics:
- A successful Wyckoff analyst must be able to anticipate and correctly judge the direction and magnitude of the move out of a TR . Fortunately, Wyckoff offers time-tested guidelines for identifying and delineating the phases and events within a TR , which, in turn, provide the basis for estimating price targets in the subsequent trend.
Nine Buying/Selling Tests:
FYI - I won't be using a P&F chart.
1. Upside objective accomplished. ✔️
2. Activity bearish ( volume decreases on rallies and increases on reactions). ✔️
3. Preliminary supply, buying climax. ✔️
4. Stock weaker than the market (that is, more responsive than the market on reactions and sluggish on rallies). Stock did not make new high, when BTC made a new ATH! ✔️
5. Upward stride broken (that is, support line or uptrend line penetrated). Currently in the beginning of a descending scallop (scythe) pattern, clearly breaking uptrend line. ✔️
6. Lower highs. ✔️
7. Lower lows. ✔️
8. Crown forming (lateral movement). ✔️
9. Estimated downside profit potential is at least three times the risk for if the initial stop-order were hit. ✔️
“…all the fluctuations in the market and in all the various stocks should be studied as if they were the result of one man’s operations. Let us call him the Composite Man, who, in theory, sits behind the scenes and manipulates the stocks to your disadvantage if you do not understand the game as he plays it; and to your great profit if you do understand it.” (The Richard D. Wyckoff Course in Stock Market Science and Technique, section 9, p. 1-2)
I encourage you to join me in being a lifelong student of the market. If you like this idea, please Like, Follow, and Leave a Comment!
GLHF,
DPT
Disclaimer:
We absolutely do not provide financial advice in any shape or form. We do not recommend investing based on our opinions and strongly cautions that securities trading and investment involves high risk and that you can lose a lot of money. Loss of principal is possible. We do not recommend risking money you cannot afford to lose. We do not guarantee future performance nor accuracy in historical analyses. We are not registered investment advisors. Our ideas, opinions and statements are not a substitute for professional investment advice. We provide ideas containing impersonal market observations and our opinions. Our speculations may be used in preparation to form your own ideas.
Hello everyone, I spotted another great application for the Wyckoff Method, this time using Distribution Schematic #2. I caution bulls, as I believe that we are at the end of an exuberance phase and now Reward and Risk have inverted for Longs! I personally think that the price can go sub 10k very quickly, and 20k~ is a likely bottom. Trade with care...
But without further ado, Here we go!
5 Step Approach to the Market:
1. Determine the present position and probable future trend of the market.
- Currently swinging bearish, and I believe I have determined the whale operating on this market's trade setup:
2. Select stocks in harmony with the trend.
- Bitcoin is a leading indicator for the crypto market, but it is led by investors' risk appetite. I am bearish on the market, and I believe that US10Y yields will hit 2% again in the nearest future (which inverts the market, and consequently, the crypto market):
- My previous Wyckoff Idea (RIOT) being validated to TP1 gives me further confidence in my logic tree of assumption, and gives me the conviction to add to short positions on the previously powerful bull market:
3. Select stocks with a “cause” that equals or exceeds your minimum objective.
- I have high conviction that (a) BTC has ended its uptrend and is currently in a distribution phase, and (b) I speculate that the macro trend is about to reverse.
- My minimum objective is to use BTC as a leading indicator for crypto related instruments.
DXY:
4. Determine the stocks' readiness to move.
- TA shows that the stock is ready for a move to the downside (I won't be sharing all of my tells).
5. Time your commitment with a turn in the stock market index.
- I have high conviction that the stock market index will also see downside in the nearest future:
Three Wyckoff Laws:
1. The law of supply and demand determines the price direction.
2. The law of cause and effect.
3. The law of effort.
Analyses of Trading Ranges:
- Trading ranges ( TRs ) are places where the previous trend (up or down) has been halted and there is relative equilibrium between supply and demand . Institutions and other large professional interests prepare for their next bull (or bear) campaign as they accumulate (or distribute) shares within the TR .
Wyckoff Schematics:
- A successful Wyckoff analyst must be able to anticipate and correctly judge the direction and magnitude of the move out of a TR . Fortunately, Wyckoff offers time-tested guidelines for identifying and delineating the phases and events within a TR , which, in turn, provide the basis for estimating price targets in the subsequent trend.
Nine Buying/Selling Tests:
FYI - I won't be using a P&F chart.
1. Upside objective accomplished. ✔️
2. Activity bearish ( volume decreases on rallies and increases on reactions). ✔️
3. Preliminary supply, buying climax. ✔️
4. Stock weaker than the market (that is, more responsive than the market on reactions and sluggish on rallies). Stock did not make new high, when BTC made a new ATH! ✔️
5. Upward stride broken (that is, support line or uptrend line penetrated). Currently in the beginning of a descending scallop (scythe) pattern, clearly breaking uptrend line. ✔️
6. Lower highs. ✔️
7. Lower lows. ✔️
8. Crown forming (lateral movement). ✔️
9. Estimated downside profit potential is at least three times the risk for if the initial stop-order were hit. ✔️
“…all the fluctuations in the market and in all the various stocks should be studied as if they were the result of one man’s operations. Let us call him the Composite Man, who, in theory, sits behind the scenes and manipulates the stocks to your disadvantage if you do not understand the game as he plays it; and to your great profit if you do understand it.” (The Richard D. Wyckoff Course in Stock Market Science and Technique, section 9, p. 1-2)
I encourage you to join me in being a lifelong student of the market. If you like this idea, please Like, Follow, and Leave a Comment!
GLHF,
DPT
Disclaimer:
We absolutely do not provide financial advice in any shape or form. We do not recommend investing based on our opinions and strongly cautions that securities trading and investment involves high risk and that you can lose a lot of money. Loss of principal is possible. We do not recommend risking money you cannot afford to lose. We do not guarantee future performance nor accuracy in historical analyses. We are not registered investment advisors. Our ideas, opinions and statements are not a substitute for professional investment advice. We provide ideas containing impersonal market observations and our opinions. Our speculations may be used in preparation to form your own ideas.
Note
Link to the article and template which I used for your reference: school.stockcharts.com/doku.php?id=market_analysis:the_wyckoff_methodTrade active
UTAD Test confirmed, should this schematic be accurate, price will decline and enter Phase D and E Distribution and Capitulation.Trade active
MACD looks extremely bearish, public idea:
Note
"Turkey Bans Cryptocurrency Payments"The Turkish central bank banned the use of cryptocurrencies as a form of payment from April 30, saying the level of anonymity behind the digital tokens brings the risk of “non-recoverable” losses.
The curbs also prohibit companies that handle payments and electronic fund transfers from processing transactions involving cryptocurrency platforms, according to a decree published in the official government gazette on Friday.
bloomberg.com/news/articles/2021-04-16/turkey-bans-cryptocurrency-payments-saying-risks-are-too-great
"Turkey Begins Manhunt for CEO of Collapsed Crypto Exchange"
Turkey launched an international manhunt for the founder of one of its major cryptocurrency exchanges after he stopped paying clients and fled the country.
The Justice Ministry is seeking a so-called red notice under which Interpol would help find, provisionally arrest and return Thodex Chief Executive Officer Faruk Fatih Ozer from Albania to Turkey, state-run Anadolu Agency reported Friday.
bloomberg.com/news/articles/2021-04-23/turkey-arrests-dozens-in-probe-of-crypto-exchange-collapse
Basically, a major exchange has performed an exit scam of $2 billion. While this amount alone is not much compared to crypto's total mcap, Turkish investors will have until the end of the month to cash out of their crypto, and should trigger a sell-off, due to momentum, fear, and the overbought bubble conditions that crypto already is in.
Should the CEO of Thodex's assets be seized by the government, it is likely they will be dumped on the market instantly.
With Bitcoin already in a shaky spot, it is likely that it will not recover its bull run before the bearish trend plays out.
However, we should watch China for their confirmation. Bitcoin's reversals typically are dictated by China's stance.
Trade active
Speculation:China will eventually exchange their bitcoin for physical gold, then ban it for good, before realizing and mandating their own CBDC.
Trade active
Downswing looking likely, Elon Musk calls Dogecoin a 'hustle' on the much awaited Saturday Night Live show:Trade active
4 Swings have followed the line nearly exactly, let us see how price proceeds!Trade active
China bans financial crypto business:reuters.com/article/crypto-currency-china/update-1-china-bans-financial-payment-institutions-from-cryptocurrency-business-idUSL2N2N510T
Is this priced in though
Trade active
Swing 5 failed to get any momentum to the upside, giving greater confidence in the downward strength:
Trade active
The Wyckoff Method has been gaining a lot of attention lately...I caution bulls and bottom callers, accumulation in Wyckoff typically does not begin until the prior downtrend has ended!
I reckon that we are still on a 'Complacency' phase, as bulls expect a quick spring back up to ATHs, but institutions will see such price action as weakness, and continue selling.
Only after the crowd has left, will the operators of the next cycle quietly accumulate.
Trade active
Price saw a bounce today, with Musk, Saylor and Dalio bringing "good" news.Now, after they raise the price to break-even, will they sell?
Trade active
Incoming top of channel on Bitcoin Volatility:Trade active
A descending triangle, heavy on support:Trade active
No real support under this until 16k:Trade active
BTC made the last bear flag on the forecasted structure. Ready for a continuation below 20k:Trade active
Swing to the downside ready: 
Trade active
Pipeline terrorist action triggered the Patriot Act. Per Snowden's leaks and subsequent reporting internet backbone infrastructure is compromised. Seizure indicates Private keys are compromised.computerworld.com/article/2489544/snowden-leaks-erode-trust-in-internet-companies--government.html
Bitcoin handed over in the ransom for the Colonial pipeline hack was recovered in days.
Note
"MICROSTRATEGY BOOSTS BITCOIN-LINKED JUNK BOND DEAL TO 500M"bloomberg.com/news/articles/2021-06-07/microstrategy-to-sell-400-million-in-debt-to-buy-more-bitcoin
Microstrategy and the Miami Conference reminded me of Bitconnect in 2017.
To find the bubble top, find the mortgage guys in 2007. Right now those guys are in crypto.
Trade active
Re-test the wedge bottom. Always short the washout before the flush:Trade active
Shorts piling on, soon higher than the previous drop from ATH... Right before G7:Trade active
Something's got to give: Trade active
It is here... The final short: 
Trade active
BVOL24H suggests immense move imminent: 
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Taps the ML line and confirms the desc. channel... When it reaches MSTR's average, it may capitulate back into the steeper channel: Trade active
Here's a good fit. The ML is right at MSTR's average... Interesting! Trade active
Speculated drop date: 
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