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What’s happening with Bitcoin (BTC): Wyckoff Reaccumulation Scheme
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Bitcoin is currently experiencing a sharp decline, with the price of digital gold plummeting below the $65,000 mark. However, there is a pattern that could explain BTC’s current moves and potentially provide us with hope.
A well-known technical analysis model for interpreting asset market behavior, especially during periods of accumulation and consolidation, is the Wyckoff reaccumulation scheme.
According to this pattern, Bitcoin’s current state could be part of a larger reaccumulation phase where retail investors and strong hands are gradually accumulating Bitcoin from each other.
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Initial Support Level (PSY): After a downtrend, this is the initial support level, where substantial buying begins to occur, slowing the decline.
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Selling Climax (SC): The price point at which strong hands absorb strong selling pressure, causing a sharp drop in price and a subsequent rebound.
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Automatic Rally (AR): When selling pressure eases after a selling climax, prices automatically rise.
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Secondary Test (ST): To evaluate supply and demand levels, the price returns to the selling climax area. Falling volumes may be decreasing, which indicates a decrease in selling pressure.
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Spring: During this possible shakeout phase the price may briefly drop below the previous low (support), which could lead to stop losses and panic selling before quickly rising again. The purpose of this move is to trap weak hands and bears.
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Sign of Strength (SOS): A new uptrend is signaled when price breaks above resistance with significant volume. The last measure of support before an asset makes a substantial upward move is called the Last Point of Support, or LPS.
The three-day chart indicates that this reaccumulation pattern appears to be what Bitcoin is doing. As of now, it appears that Bitcoin is testing support levels, which could mean that a big move higher is imminent.
The pattern suggests that after this consolidation phase, Bitcoin could experience a strong upward momentum, potentially pushing prices towards previous highs and beyond. While this model does not guarantee future performance, it provides a structured way to interpret market behavior and identify potential opportunities.
About the author
Arman Shirinyan
Arman Shirinyan is a trader, cryptocurrency enthusiast and SMM expert with more than four years of experience.
Arman firmly believes that cryptocurrencies and blockchain will be in constant use in the future. Currently he focuses on news, articles with in-depth analysis of crypto projects and technical analysis of cryptocurrency trading pairs.