Bitcoin price briefly passed the $ 55,500 mark today, removing any resistance to the downtrend and possibly signaling that a bull cycle is back. This move may have surprised the bears, but what happens was determined about 90 years ago.
BTC price 4-hour chart | Source: Tradingview
This is Richard Wyckoff’s Wyckoff theory, and how the 19th-century market guru could predict the price development of a digital asset that didn’t come out until the 2000s.
Interesting facts about Rickard Wyckoff and his theory
According to Wikipedia, Richard Wyckoff is known as an investor in the US stock market. He was also the founder and editor of the Magazine of Wall Street in the early 1900s.
Wyckoff has a deep passion for the mechanics of trending or changing. He spent much of his later career doing market research with other then investors such as Jesse Livermore and JP Morgan.
Wyckoff believes in the idea of a “comprehensive operator” or a single mind controlling the ups and downs of the market. In the late 1930s he investigated the behavior of this “synthetic operator” and developed certain charts that signaled to traders when the market was in one of four different phases: consolidation: accumulation, price increase, distribution and discount.
The periods of re-accumulation and redistribution are also known as the midpoint before the cycle repeats. But how does all of this apply to Bitcoin?
Analyst Tony “The Bull” Spilotro also once suggested that before the big drop, Bitcoin looked like it was in a sales phase.
– Tony “The Bull” Spilotro (@tonyspilotroBTC) April 23, 2021
Bitcoin price breakout can be predicted with 90 year old chart
Bitcoin’s price movement is evident during the distribution period as the leading cryptocurrency by market cap hits $ 65,000 in April 2021.
After a sharp slump in May, the “aggregate operator” decides whether assets should be redistributed or newly accumulated. The following graphic clearly shows that a re-accumulation has taken place.
Re-accumulation on a Wyckoff pattern will result in a sharp rally and a new all-time high | Source: TradingView
Next comes the bullish phase. When it ends, the redistribution will take place again and put an end to the current bull cycle.
At this point, it is what engineering patterns developed more than 90 years ago suggest to watch for signs of redistribution or soil accumulation. But that is only possible if you believe in the power of Wyckcoff’s theory.
The author of “Bitcoin Reform” shares interesting charts
Investor and analyst Tuur Demeester, author of the groundbreaking Bitcoin Reform report, recently shared his views on the ongoing BTC bull trend.
’20 -’21 Greed period clocked with 196 days, price 3x
The cooling off period is likely to end very soon.
Next round two with another 100+ days of greed? https://t.co/u8Cq4KA7dS pic.twitter.com/FB0ZsR3Oz6
– Tuur Demeester (@TuurDemeester) October 6, 2021
According to his diagram, Bitcoin supply is returning to the “greedy” zone. In which more than 55% of BTC has unrealized profits (profit on paper).
The previous long-term trip into this “greedy” area drove the price up 200%, supported by institutional and private investors.
The process lasted 196 consecutive days and was replaced in May by a phase of “uncertainty” in the “optimism / rejection” zone. Demeester said the “cool down” would be over soon.
After “Black Thursday” in March 2020, Bitcoin landed in the “handover” zone and has not returned since then.
In addition, Demeester noted that the two most recent bull runs (2013 and 2017) each had two waves. Hence, BTC’s surge to $ 65,000 in May is most likely the early stage of this rally.
Bitcoin’s “fear and greed” index is rising for the third day in a row. Today it has entered the “extreme greed” zone and is currently 76/100.
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