This will be my shortest post to date, but its something I have been thinking about today on the back of
(check out his Substack) mentioning the Wyckoff Trading Indicator today. I had a quick look at some charts to see what might be following a Wyckoff Accumulation pattern with a view of taking a small trade to get some skin in the game and see how it played out over the next number of months.The key objective of the Wyckoff System is to, as best as possible, perfect your market timing for highs (distribution) and lows (accumulation). Its a form of Technical Analysis to provide confluence to other fundamental or momentum analysis with an overall objective to achieve better risk/reward ratios for your positions.
The above chart outlines the 5 Phases of a Wyckoff Accumulation pattern with action confined to a trading range (TR) before a breakout to the upside (“jump across the creek”) in Step 9.
If you look at BTC/EUR (sorry I am European) you will see some broad similarities beginning to show. It’ll be worth keeping an eye on over the coming weeks. If the pattern does play out there will be multiple opportunities for entry points if so minded. I reckon we are either in Step 4 or 5 at the moment in the chart below.
Given the Spring (or bear trap) is potentially in the second half of Feb (some 6+ weeks away) there is time to sit back and review this one before taking any exposure if you liked a small % of high vol/high beta risk. Note this is an extremely volatile asset class going through a wash out of bad actors, liquidations and deleveraging. Obviously BTC has seen 70%+ declines from its Nov 2021 highs so we could be near a bottom, but if you were entering I’d suggest small position sizes given the volatility and risk of another possible leg down.
Please comment on any potential Wyckoff Patterns you are seeing in the markets today, it would be great to cross reference them. Alternatively, tell me I am totally crazy, to rehydrate and let these dizzy spells pass.
NB: This is not financial or investment advice, please consult with your own independent financial advisor before deploying any of your hard earned cash into these volatile markets (particularly digital assets).