Bitcoin does not have enough strength to make a big move upwards, we have seen this in recent days. This is undoubtedly due to the increasingly stronger dollar (which is bad for bitcoin). And also the downward movement of the stock indices is negatively affecting the bitcoin price.
Perhaps we can add another reason.
When I looked at the chart this morning, I saw a pattern on the chart. Not a normal pattern like a bear flag or rising wedge, but a manipulation pattern. In this analysis I am going to tell you about this manipulation. Using a number of images, we will analyze the price.
The manipulation pattern I saw emerge on the chart is based on Wyckoff logic. Therefore, we start this analysis with Richard Demille Wyckoff (November 2, 1873 – March 7, 1934): an analyst from the last century who studied the stock market with a technical approach.
His success is based on the principle that the market goes through four different phases in its cycles that follow each other.
First, the accumulation phase. This phase starts when the price hits the bottom of the bear market. Gradually, people start buying bitcoin again, which fuels the next phase: the markup. Here the price shows a nice rise.
The model is rock solid, because after a markup phase follows a distribution phase, where the big investors sell their bitcoin. However, in such a way that the price does not drop significantly, in order to try to make people think that the price will continue to go up.
In this way, people’s emotions are played with. Eventually, when many people at that time think that the price will go up, the “market makers” make sure that the price pops down, and we enter the markdown phase.
Last year we saw these 4 cycles emerge very clearly on bitcoin’s chart (see image below). Pure manipulation by the big ‘market makers’ according to Wyckoff’s scheme.
Okay, the bitcoin market is manipulated from time to time, but why are you writing an analysis about it now?
I’m doing this because I’m now going to zoom in further on the price to the current price action. What we see there is a mini distribution phase. Not nearly as big as we saw last year. In this case, it’s only a couple of weeks.
Schedules based on Wyckoff logic were developed by Roman Bogomazov. He is a teacher of investing and trading based on the Wyckoff Method. His diagrams were all over the Internet when the bitcoin price was manipulated last year in the accumulation and distribution phase.
When I looked at the prices this morning I also saw very clearly a pattern emerge that can be seen in one of his distribution diagrams.
In the image above we see a very clear and detailed pattern. Completely laid out to play on people’s emotions.
As I mentioned earlier, distribution patterns are designed to make investors think that the price is going to go up even further. This is because the price goes higher and higher, while the price eventually drops down.
We now take the current price action and start comparing the two images. For this I’ll use the terms that are in the image.
We’ll leave the letters for what they are, as this would get too complicated if I went into this too deeply.
The price makes its first top at ‘BC’, then drops and tests a support. Then the price comes to ‘UT‘. This top is just a bit higher than BC. Then the price shows a few red candles, but not quite up to the support of ‘AR‘.
Next comes “UTAD Test“. So then we see three increasingly higher tops which makes one increasingly positive and gives hope that bitcoin will continue to rise.
As you can see in the image, a massive downward move followed after the last top.
Bitcoin is showing exactly this movement in recent weeks. So there is quite a bit of manipulation going on right now.
When price sees the full pattern play out, it is very likely that bitcoin will move towards the $18,900 mark and most likely even lower.
Of course, anything can change in the crypto market. We can never say anything with certainty, still important to keep an eye on this.