Happy Wednesday. I hope everyone ended up relatively unscathed with the boomerang Bart action this past Monday evening. Never a dull moment trading Bitcoin.
It’s interesting to see the discussion around digital currencies begin creeping into the US elections campaign narrative recently. Two days ago, US Representative Cynthia Lummis had a very wide-ranging interview with Coindesk about purchasing her first Bitcoin in 2013 and becoming and advocate for digital currency.
Meet the US Senate Candidate Who’s Invested in Bitcoin Since 2013
An interesting sidebar is the Governor of Colorado Jared Polis holds the distinction of being one of the first politicians to accept Bitcoin campaign donations while running for re-election as a US Congressional Representative for the state of Colorado in 2014 directly after an FEC ruling in that same year.
Congressman Jared Polis Accepting Bitcoin Donations Following FEC Ruling
Perhaps some form of mainstream adoption may be closer than it appears. Time will tell.
With that, let’s get into the Technical Analysis.
The 4H Intraday Chart
Looking at the 4H Intraday Chart, the formation built up a tremendous amount of cause during the consolidation period right before the breakout to the $10,420 level. However, once the formation hit that high, it retraced the full breakout 100% and fell further collapsed to $9,280 before rebounding to the $9,420 handle. Bart much?
Since the Selling Climax at $9,280, the formation appears to have started a regular Wycoff Accumulation pattern. The characteristics of this pattern are more visible on the 15 Minute Intraday Chart.
After establishing support from the Selling Climax (SC) at $9,280, the formation established the initial upper end of the trade range at $9,440 from the Automatic Reaction (AR) and fell into a tight trade range between $9,440 and $9,420. The formation appears to have continued progress during consolidation into a normal Wyckoff Phase B Accumulation as it pushed above the initial upper resistance level at $9,440 to $9,640. Since that thrust upward, PA has been confined in the $9,640 - $9,440 trade range as of this writing.
Currently there is approximately $300 of cause built into the formation during this recent consolidation period, which would suggest a current price target of $9,800. As the consolidation continues, more cause will be built into the formation, requiring a target price re-calibration.
The Volume Oscillator printing a negative number (-16.54%), suggesting a shift in the current trend is on the horizon.
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.
My expectation is the 1D formation should begin to print lower highs over the near term before moving onto Phase C of the Wyckoff Distribution. Counterintuitively, on shorter intraday time frames such as the 4H and 15M charts, I would expect to see more stepstone accumulation to appear and move the formation into the higher $9,000’s region ($9,800 - $9,900) before dropping back down to form another lower high and so on over the near term until Phase C begins.
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
I've still been waiting for my post halving dip that hasn't really shown up yet...
@jcornel I think it will be a while. This distribution has been strangely bullish because we would normally have seen that Sign of Weakness (SOW) early in Phase B before the Upward Thrust (UT). At this point, I'm not sure we will see those prices (which I've been waiting for as well) until Phase E - so maybe fall?
Very nice analysis...you will get more curation rewards if you post from the Leofinance / Steemleo interface.
Posted Using LeoFinance
@rollandthomas I just jumped on the interface and I'll give it a shot for the next Degen Daytrading Diaries I post.
Funny aside - you can thank @r0ndon for this series. He's been breaking my balls about doing this for some time.