Bitcoin is currently in no man’s land. The price is hardly subject to major fluctuations and the direction is clearly sideways. A very logical development if you look at the volatility of the past few weeks. However, it is noticeable that there are signs of possible manipulation in this sideways movement. The price appears to follow a pattern known as the Wyckoff distribution. How does this situation affect the price of Bitcoin?
A likely scenario
We start this analysis by highlighting the important price levels. In the image below you see the hourly chart of the largest cryptocurrency. The price is showing sideways movements and pointing towards clear resistance and support levels.
The top black line is the main resistance. Last week there was a clear rejection here. The lower black line serves as a support level. As long as the price does not rise above $34,650, I take into account the scenario indicated by the arrow on the chart: a correction to $33,300 (down 3%), followed by a rise above $35,000.
Not only does this scenario make sense due to the liquidity around the $33,300 level, but it is also a likely scenario due to the manipulation scheme that the price seems to be following…
Manipulation?
In the chart below I have included the picture that Bitcoin seems to be completely following so far. As I said in the introduction, this is a Wyckoff manipulation scheme. This may seem complicated, but it is actually just a plan developed by an analyst based on market manipulation. Remember that the meaning of terms like “BC” or “ST” is not important at this point. They’re just there so you can see where we are in the planning.
If the price continues to follow this schedule, it is time for a correction and a low below the “AR” point. When this happens, investors panic and think stocks will fall sharply. At that point, there will be a sharp rise above the ‘BC’ point, meaning Bitcoin is trading at over $35,000. Then there are people who become hyper-optimistic and you guessed it: this is the time of decline. This chart is all about market psychology.
This pattern obviously also has an invalidity point. This will be achieved if the price rises above $35,400 or if the price drops to $32,000 in a bearish scenario. This would not be consistent with the Wyckoff pattern and is therefore worth keeping an eye on.
Source: BTCDirect
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Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
