BTCUSDT Possible Distribution Pattern
The Bitcoin run could be coming to a halt here soon. Looks like distribution could be in play. All targets have been reached from the 3 Poor Performing Patterns idea. There is still one target that has not been hit which is the target from the right angled descending broadening wedge in my BTCUSDT Redistribution idea.
In the current pattern The UTAD looks like it is completing, I will be looking for another SOW followed by a move up to complete the UTAD.
Wyckoff Distribution Breakdown:
Preliminary Supply (PSY): In this subphase, the smart money (large institutional investors and savvy traders) start selling their positions, but the market still looks bullish. The price may show a slight uptrend, but the volume is lower than usual. Indicators such as Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI), and Stochastic Oscillator (STO) may show signs of bearish divergence.
Buying Climax (BCLX): The buying climax is a point where the market has reached its peak, and buyers have exhausted their demand. This results in a rapid price increase, accompanied by a spike in volume. Market makers use this opportunity to unload their positions, resulting in a reversal in the market trend.
Automatic Reaction (AR): After the buying climax, the market experiences a sharp price correction, which is known as an automatic reaction. The volume in this phase is relatively high, indicating that there is significant selling pressure. Indicators such as MACD and RSI may show bearish signals, while STO may become oversold.
Secondary Test (ST): During this subphase, the market tries to test the previous high, but fails to break through. This creates a double top pattern and confirms the previous resistance level. The volume is lower than the previous subphase, indicating that the selling pressure is decreasing. Indicators such as MACD and RSI may show bearish divergence.
Sign of Weakness (SOW): In this subphase, the market starts to show signs of weakness, indicating that the bears are taking control. The price may start to decline, and the volume is lower than the previous subphase, indicating that the selling pressure is decreasing. Indicators such as MACD and RSI may show bearish signals.
Upthrust (UT): The upthrust is a false break above the previous resistance level, which attracts buyers but is quickly followed by a sharp reversal. The volume is usually lower than the previous subphase, indicating that the buying pressure is decreasing. Indicators such as MACD and RSI may show bearish divergence.
Upthrust After Distribution (UTAD): This is a similar subphase to the upthrust, but it occurs after the distribution phase is complete. The volume is usually low, indicating that the buying pressure is almost nonexistent. Indicators such as MACD and RSI may show bearish signals.
Last Point of Supply (LPSY): This is the final subphase of the distribution phase, where the market shows the last attempt to push the price higher. However, the buying pressure is very low, and the price quickly reverses to the downside. The volume is usually low, indicating that the selling pressure is almost nonexistent. Indicators such as MACD and RSI may show bearish signals.
In the current pattern The UTAD looks like it is completing, I will be looking for another SOW followed by a move up to complete the UTAD.
Wyckoff Distribution Breakdown:
Preliminary Supply (PSY): In this subphase, the smart money (large institutional investors and savvy traders) start selling their positions, but the market still looks bullish. The price may show a slight uptrend, but the volume is lower than usual. Indicators such as Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI), and Stochastic Oscillator (STO) may show signs of bearish divergence.
Buying Climax (BCLX): The buying climax is a point where the market has reached its peak, and buyers have exhausted their demand. This results in a rapid price increase, accompanied by a spike in volume. Market makers use this opportunity to unload their positions, resulting in a reversal in the market trend.
Automatic Reaction (AR): After the buying climax, the market experiences a sharp price correction, which is known as an automatic reaction. The volume in this phase is relatively high, indicating that there is significant selling pressure. Indicators such as MACD and RSI may show bearish signals, while STO may become oversold.
Secondary Test (ST): During this subphase, the market tries to test the previous high, but fails to break through. This creates a double top pattern and confirms the previous resistance level. The volume is lower than the previous subphase, indicating that the selling pressure is decreasing. Indicators such as MACD and RSI may show bearish divergence.
Sign of Weakness (SOW): In this subphase, the market starts to show signs of weakness, indicating that the bears are taking control. The price may start to decline, and the volume is lower than the previous subphase, indicating that the selling pressure is decreasing. Indicators such as MACD and RSI may show bearish signals.
Upthrust (UT): The upthrust is a false break above the previous resistance level, which attracts buyers but is quickly followed by a sharp reversal. The volume is usually lower than the previous subphase, indicating that the buying pressure is decreasing. Indicators such as MACD and RSI may show bearish divergence.
Upthrust After Distribution (UTAD): This is a similar subphase to the upthrust, but it occurs after the distribution phase is complete. The volume is usually low, indicating that the buying pressure is almost nonexistent. Indicators such as MACD and RSI may show bearish signals.
Last Point of Supply (LPSY): This is the final subphase of the distribution phase, where the market shows the last attempt to push the price higher. However, the buying pressure is very low, and the price quickly reverses to the downside. The volume is usually low, indicating that the selling pressure is almost nonexistent. Indicators such as MACD and RSI may show bearish signals.
Komen:
Looks like price has reached the second SOW and could be making it's way back up to the complete the UTAD. I have identified a falling wedge and a descending broadening wedge that could play out. The calculated targets happen to line up with my initial targets at
30
,888 and
31
,222. These patterns are typically poor performers for continued bullish movement.
31
,222. These patterns are typically poor performers for continued bullish movement.
