Wyckoff Accumulation: Second Spring ahead
If you have been reading with my previous posts, I have been following the down trend on BTC. I identified a Wyckoff Accumulation Schematic that has been played out by big intrest that want to accumulate Bitcoin at a lower price. (Go read my other posts of Wyckoff Accumulation if you have no idea what I am talking about).
Now are at the end of Phase C of a Wyckoff Schematic. This phase is characterized by a spring event (a sudden and sharp decline in price) that took place when the price of BTC hit 39, 600 USD on January 10th 2022.
In order to asses the affectiveness of a srping event, one has to take a look at the volume bars. A succesful spring event is characterized by a low volume bar. This indicates that the supply has been exhaused and the asset is ready for a markup. However, on January 10th we did not see this. Therefore, I believe that a second spring test is possible.
Here is my TA …
Based on Fib Retracement, the price can go to 40,459 and 38,350 USD on the downtrend. We can expect the price of BTC to go anywhere around this range based on the Wyckoff Accumulation Schematic. We already witness one spring event (at 39, 600 USD). However, this spring event had high volume indicating that the price is not ready to be marked up.
The Wyckoff Accumulation Schematic is playing out as envisioned. The price has touched twice the support level at 41,100. We can expect a second spring event around 40–38 k usd.
The spring was accompanied by high volume. In order to have a successful spring event that indicates the price is ready for a markup, the spring has to have low volume. This implies that the supply has been exhausted and the asset is ready for a markup.
The volume and volatility are decreasing in general. This indicates that we are coming to an end of phase c. If the price continues to decline but volume is low, this means price is ready for a markup.
In reaction 1, we can see that the volume was relatively lower than other day, but the price swing was greater. Meaning the Effort (volume) was greater than Result (price). The price decreases by a lot, but on smaller spreads and lower volume, indicative of reduced supply, which in turn suggests the potential for at least a short-term rally, which took place.
In reaction 2, we can see that the volume was higher than in reaction 1 but the price swing decreased. The price did not go as low as in reaction 1. In other words, the Effort (volume) increases while the Result (price) decreases, showing the presence of large buyers absorbing supply in anticipation of a continuation of the rally.
With that being said, I think there is still a high chance of a second spring event that can take the price down to 40–38,300 USD. If the volume is low on the spring, we can confirm that Phase C has concluded, and we can expect a recovery in price in Phase D.
Right now is a good opportunity to buy and wait for the markup.
