Bitcoin: Bearish Distribution Wyckoffian Analysis 1H (May 16)

15 May 2020

X Force Global Analysis:


In this analysis, we explore Bitcoin's bearish scenario based on the Wyckoffian logic.

Analysis

- On the right hand side, we have a simple diagram of the market phases developed by Wyckoff.
- It's important to remember Wyckoff's emphasis on supply and demand, cause and effect, and effort.
- In the accumulation phase, there is a high supply with low demand.
- The effect of high supply and low demand is rock bottom prices
- The Mark Up phase occurs when the supply of an asset has been diminished
- The demand then picks up when retail investors start taking notice of the upside of the underlying asset.
- In the Distribution phase, demand stays the same, while supply increases
- During the Mark Down phase, supply is at an all time high
- Basd on the wyckoffian logic, we are currently at a distribution phase, looking for a Mark Down.
- It's also important to note that we have been rejected constantly by the mid resistance of the bollinger band


Market Sentiment:

Long short ratios are at 73 to 27, with exceptional amounts of long and dominant bullish sentiment in the market.


What We Believe

As mentioned previously, a break and close above 10K was imperative for a bullish rally. However, it seems as though Bitcoin is having a hard time with rejection around 9.5k levels too. Interpreting this as a distribution phase, while a test of the 10K levels could definitely be possible, the bearish probabilities are still high, and the corrective scenario remains valid.

Trade Safe.