The price of Bitcoin has been falling since reaching a high of $ 10,491 on February 13. Prices started in March with an increase but the move to move down continued on March 7.
Highlights of Bitcoin price
- Bitcoin price can move in a Wyckoff accumulation pattern.
- It has dropped in the last three weeks.
- Price is in the process of completing wave C of an ABC formation.
- The price may follow an ascending support line.
The Wyckoff distribution theory states that there is a proportionate effect for every engine in the market. Therefore, after each accumulation period, there is a period of price increase, distribution and finally a discount. More specifically, each stage has unique characteristics, shown in the tweet below by trader “TraderX0”, who used this theory to outline a potential move for Bitcoin price.
$ BTC – 3rd update
Not surprised much tbh pic.twitter.com/XRdnMZGPzF
– TraderXO (@ TraderX0X0) March 9, 2020
Let's take a closer look at Bitcoin price movement and see its relevance to this theory.
A brief summary of each Wyckoff phase:
- Phase A begins with Selling Climax, which serves to outline the areas of support and resistance of the range.
- Phase B creates a relatively low spurt to bounce up to confirm a high.
- Phase C creates a higher bottom (Last Point Of Support) or lower (Spring), depending on the scenario.
- Phase D is the expected breakout.
- Phase E introduces prices into a new territory.
The vertical plunge makes the Spring scenario more likely. At a plummeting speed, wave C will end at the current level. Instead, a low near the secondary test level of $ 6800- $ 7000 seems more reasonable.
A rough outline of the five sub waves of wave C is given below:
Bitcoin trading range
Trader outlined Bitcoin's trading range within a three-day time frame – with resistance and support zones at $ 10,000 and $ 6,400, respectively.
– TraderXO (@ TraderX0X0) March 8, 2020
Looking at the key Fib levels, the resistance and support levels seem to be closer to $ 6700 and $ 10,200 – Fib 0.618 and 0.236 levels of the whole rally.
In addition, Bitcoin price seems to be following an ascending support line that originated from the December 2018 bottom. It coincides with the Fib support level in April, making it a very likely time to bottom out.
In short, Bitcoin prices may be moving in a Wyckoff accumulation pattern. According to it, prices will bottom near $ 7000, before starting the uptrend after April.
You can see the price of Bitcoin here.
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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