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Forecasting Bitcoin’s Future Movement using Wyckoff Distribution

2 mins
Updated by Kyle Baird
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In Brief

  • The Bitcoin price could be following a Wyckoff distribution pattern with resistance and support at $4,800 and $6,800.
  • The model predicts BTC to decrease until it reaches $4,800.
  • A breakout is expected in the latter half of the year.
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The Bitcoin price reached a low of $3,850 on March 13 and has been increasing since. The shape of the movement resembles a Wyckoff distribution chart.
Full-time trader @TraderX0X0 tweeted a Wyckoff distribution chart that he believes will serve as an accurate predictor for the BTC price movement in the medium-term. He believes the price has just begun the “B” phase, which will entail a price decrease towards the support of the distribution. https://twitter.com/TraderX0X0/status/1249499756080046080

Short-Term Bitcoin Wyckoff Pattern

The BTC price movement since March 19 closely resembles a bearish Wyckoff distribution. BeInCrypto previously outlined this chart using a lower time-frame. It does not interfere with the current bullish distribution since that pattern is occurring in a longer time-frame. The phases for the bearish Wyckoff are given in the image below:
Bitcoin Bearish Wyckoff
Bitcoin Chart By Trading View
The accumulation has been going on since March 19 inside the range of $5,700-$6,900. The resistance line is found by the ‘Buying Climax,’ which occurred on March 20. The entire price movement during April 6-9 is considered a deviation above the normal range, a movement that is confirmed since the price fell back inside the range — called the ‘upthrust after distribution.’ According to this distribution, a decrease below the support line of the range followed by its validation as resistance should occur. Beyond that, if the price breaks down below the horizontal support level of $5,700, it is likely to head even lower.

Long-Term Wyckoff

Now, we will move on to the long-term distribution pattern which has a range between $4,800 and $6,800. According to the distribution, the price is currently in the ‘upthrust’ stage, since it has moved above the horizontal resistance level. As stated at the beginning of the analysis, this is the initial movement of phase ‘B.’ The expected future movement is a downward move that takes the price below the horizontal support level. Therefore, this movement is aligned with what was outlined in the bearish Wyckoff chart. The potential low below the support line is known as the ‘show of weakness,\ which could be the catalyst that initiates an upward move that causes it to break out above the resistance line. As for the exact value of the low, it is possible that it occurs both below and above this support line. This level is known as the ‘spring’ when the price drops below, and the ‘last point of support’ if it remains above. If the price reaches this level, we will have a clearer understanding of the time period required for the price to complete this entire distribution.
BTC Bullish Wyckoff
Bitcoin Chart By Trading View
To conclude, since reaching a low on March 13, the Bitcoin price has possibly been following a Wyckoff distribution pattern. If so, it will likely make another low near the March 13 values before beginning an upward move and breaking out towards the latter half of the year.
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Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst. (I do not have a discord and will not contact you first there. Beware of scammers)
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