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Bitcoin: Distribution Model ...

Bitcoin: Wyckoff Distribution Model Sends Bearish Signal
CONTENT

  • Bitcoin dynamics are like the phases of Wyckoff’s distribution scheme.

  • Resistance and support are at $ 6800 and $ 6100.

  • BTC may be trading in line with the wedge pattern.

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Bitcoin peaked at $ 6,900 on March 20, after which it settled in the $ 6,900- $ 6,100 range, not counting the failed bearish breakout on March 27. On April 2, the price surged up and reached a high of $ 7250. However, Token As the use of cryptocurrencies grows, new types of tokens are emerging. They can represent value or something intangible like voices. Two … More could not maintain the achieved heights and returned to the range.

One of the most famous patterns applied to such dynamics is the Wyckoff distribution. Well-known trader @CryptoNewton points out the phases of this pattern, which are very similar to the current dynamics of Bitcoin, especially given yesterday’s price movements. If the pattern teaches development, we can expect the cryptocurrency to fall below the support level of $ 6100.

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Bitcoin: Distribution Model ...

– Shelby (@CryptoNewton) April 2, 2020

Let’s analyze the behavior of Bitcoin to determine the likelihood of such a scenario..

Phases of the Wyckoff Method

If Bitcoin does go through the so-called bearish distribution stage, it was preceded by several other phases noted in the chart below..

Initial testing of the $ 6,800 level was accompanied by a “demand climax”, while the subsequent retreat to the $ 6,100 support is considered an “automatic response”.

The main indicator suggesting a fairly high likelihood of a bearish bounce is two instances of weakness below the $ 6100 support zone, combined with a very long upper candlestick wick formed yesterday..

If the pattern continues to be implemented, Bitcoin may drop below the $ 6800 mark, which now acts as a support. In this case, this level will again become resistance and lead to accelerated sales. The final confirmation of the $ 6800 level is called the “last point of supply”, where players will have the last chance to exit the market.

Falling wedge

In the longer term, Bitcoin may be inside a falling wedge pattern. This is a bearish reversal pattern that suggests a downward breakout of a wedge followed by a significant decline..

Bitcoin: Distribution Model ...

In the event of a close below the blue dashed line ($ 6750), which is the main support area on the 6-hour charts, a subsequent exit from the wedge pattern in a south direction can be expected.

So BTC is possibly following the Wyckoff distribution model. In case of closing below $ 6750 on 4-6 hour charts, the price may continue to decline with an exit from the current wedge pattern.

 

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