The Degen Daytrading Diaries: Bitcoin Enters a Phase E Wyckoff Distribution

in LeoFinance4 years ago (edited)

Happy Thursday. While Bitcoin pushes forward into a more bearish market in the near term, the news cycle around cryptocurrency and stablecoins continue to dominate news cycles and continues to be very upbeat.

Bank Frick, the cryptocurrency friendly bank in Lichtenstein, now processes payments in USDC as an alternative to processing payments via the SWIFT system.

"With the addition of USDC, we enable our customers to process USD payments quickly and token-based. Compared to the classic SWIFT procedure, the processing time is significantly reduced," said Stefan Rauti, head of blockchain banking at Bank Frick.

Crypto-Friendly Bank Frick Now Processes Payments Via USDC Stablecoin, Says it is Faster Than SWIFT

With that, let’s get into the Trading Analysis…

The 15M Intraday Chart

Looking at the 15M Intraday Chart, the formation moved into a Phase C Wyckoff Distribution (arguably the most volatile phase in a Wyckoff Distribution), shortly after the PA formed a “Creek” of cascading lower lows. This PA was followed by the initial Upward Thrust (UT) at the Jump Across the Creek which failed to at least hit the lower resistance line at $9,860, signaling a potential Distribution was underway.

After a brief consolidation period throughout the mid-range of the formation, the PA volatility came in relentless wave after wave: four Upward Thrusts After Distribution (UTAD) and a test of the $9,600.00 support level. The UTADs topped out at $9,880.00, $9,840.00, $10,000.00, and $9,960.00 respectively, yet none of the UTADs decisively broke the $10,000.00 resistance level, also signaling a potential Distribution was underway.

Shortly after, the PA decisively broke through the lower support handle at $9,660.00 and subsequently tested support at $9,600.00 on a Sign of Weakness (SOW) signaling entry into a Phase D Wyckoff Distribution. After moving higher to the midpoint of the trade range to $9,780.00, the PA smashed through the lower support handle again at $9,660.00 and pushed through support at $9,600.00 to the $9,580.00 price handle on a second consecutive Sign of Weakness (SOW).

Once the formation exits the trade range and the PA moves below the lower support handle of $9,660.00, it will signal the PA has moved into the final phase (Phase E) of a Wyckoff Distribution, and climactic price action should happen shortly after.

The 4H Intraday Chart

Looking at the 4H Intraday Chart, the formation has mirrored the PA on the 15 Minute chart With Upward Thrusts After Distribution (UTAD) at $9,880.00, $9,840.00, and $10,000.00 respectively.

Three key takeaways with the 4H Intraday chart which add to the argument a Wyckoff Phase E Distribution is unfolding (i) during the Upward Thrusts After Distribution (UTAD), none decisively broke the $10,000.00 resistance level, suggesting a turn lower was in play, (ii) the PA continued to follow the trendline established from the Last Point of Support (LPS) at the $8,820.00 handle, until the PA broke decisively downward after forming a higher low (and LPSY) from rejection of the $10,000.00 price handle, and (iii) that decisive break resulted in a collapse through the critical lower support handle of $9,660.00 and through support at $9,600.00 in a single candle. All these signs appear to signal a Phase E Wyckoff Distribution is about to occur.

The formation of the 4H Intraday chart currently has about $1,000.00 of downside cause built into the formation from the congestion, which would suggest a target price of $9,040 once the climactic action of the Phase E Wyckoff Distribution exhausts all the downside cause in a Selling Climax (SC).

The 1D Chart

Looking at the 1D chart, the formation remains with Phase B of a normal Wyckoff Distribution. Typically, after a Phase B upward thrust, the formation will begin to print lower highs as large interests are net sellers of Bitcoin and have the goal of exhausting as much of the remaining demand as possible.

Currently the formation on the 1D is printing a red candle, which is currently at higher low relative to the previous red candle. My expectation is the 1D formation should continue to print lower highs over the near term and move lower towards the bottom of the trade range to the $8,120.00 price handle. Congruently, shorter Intraday time frames such as the 4H and 15M charts are both signaling a Phase E Wyckoff Distribution is underway as well.

My expectation is for the formation to move lower in the near term, with a current price target at the $9,040 handle, followed by consolidation and distribution around this range before the next leg down.

Always remember this is not trading advice.

Outside of that, Happy Trading.


You can follow me and keep up to date on Tradingview as well. I trade under the handle FOFAgent1 at tradingview.com

Posted Using LeoFinance