IS THE BITCOIN BOTTOM IN? SAFE TO BUY MORE CRYPTO? WYCKOFF METHOD
The markets have been extremely fearful for the last few days, however, were seeing a recovery on the price. So this begs the questions. Have we seen the bottom is the bottom in? How can we tell if the bottom is in? Should we be buying cryptocurrency and, of course, is the bull market over we plan to answer all these questions in todays video, looking specifically at wyckoff analysis, as you may be able to tell from the chart here so before i dive in get those youtube numbers up. Like button subscribe bell notification icon because well go through this content and keep it up to date on the channel so make sure youve done all those down below and of course, share this around or bookmark this video. So you can come back to it and have a refresh on the wyckoff analysis so that if you get into one of these fearful times, you can feel a little bit more at ease all right. So lets crack on with the charts, wyckoff analysis im going to show you my superannuation fund portfolio, thats. Basically, the retirement fund not to brag about it, but to show you, the dollar, cost averaging method, the good stuff that ive done in it and the super noob stuff that i did in it early on very early on back in 2017. So ill show you those on the charts, therell be a few links for you guys to use in the description down below.
If you want to go through to set up your own superannuation fund with, for example, new brighton capital link is down below thats the aussie guys for the americans. This is similar to your 401k as well, so link will be down there and then also to set up with an exchange just so you can go through those processes if youre looking to do it yourself as well, using some of the tools that ill look at Here, for example, the fear and greed plan which is available to all of our members in patreon and premium as well, theres a special on patreon at the moment, 16 off for the annual program there, okay, so this fear and greed plan shows thousand buck entries. This was back in may june and july reason being is that we were entering using the fear and greed index when it was hitting 15 or lower. So were going to use some workout analysis today as well, because we saw some pretty good drops into 41. 42. 000 on bitcoin and the data here only got to 16., so we had 18 16 and were back to 25 already, so the fear and greed plan, one thousand one thousand one thousand. Every time we drop to that level were buying in so basically thats, similar to like a dollar cost averaging method. The average we have here is nearly a third of a bitcoin with a return currently even with this massive drop of 50 return, so were still sitting in profit and were feeling pretty good about ourselves in in that regard.
So the dollar cost averaging method here comes into effect. When i look at my superannuation fund, so the current value is four hundred and thirty, three thousand four hundred digital currencies total four hundred and twelve thousand eight hundred. So this has dropped a little bit if youve been following on the channel theres about twenty grand of cash in there, and i have bought another 10 000 worth of ethereum in this account. Taking a look at some of the purchases i made here on the account, you can see its about a thousand bucks at a piece and then i got a little bit giddy and started to throw in a little more than a thousand bucks getting half a bitcoin For four thousand four hundred aussie, a thousand aussie one point: uh sorry point one: seven, six and point: zero: eight for five hundred point, one: seven three, so this was all through august, 2017 and november 2018 and theres a few more as we go up. So what does this look like on the chart? Well, ive got pink arrows of where i was purchasing bitcoin, using something similar to this dollar cost averaging plan that ive just talked about available to all the members in patreon links to all this stuff is down below. If youre interested, so this looks like at the time pretty bad buying, but if you zoom out scroll out have some patience, then it doesnt really look so bad on the the bigger picture here, especially when you put it into log its not so bad.
At the end of the day, but at the time it really doesnt seem like the best idea, and you can see the the few mistakes that i made in here, so the markets going up im buying buying buying buying. Then we get this bit of a blow off top. We sort of ran up straight and then dumped for a few days. So naturally you get scared. Market moves up. Another day moves up and i think im going to sell some. So the blue arrows are the sells. The pinks are the buys, so i sell i sell i buy on the way up again, i sell on the way down and then realize that this market is actually still in a bull market. So you can see on this sort of chart its similar to what we experienced. So we get big moves down a recovery it doesnt make. It well see this on the wyckoff analysis as well. Then a lot of people will potentially sell out or sell out as the market goes down, as you can see, i did here and then after the sales i turn back to the buying, because i can see the market absolutely take off and when we throw some Volume in here we can really see that the market is beginning to play out again. So the idea here is that we want to get in with the trend and start to move with it so buying buying buying.
This is all we can see at this point. In time, obviously, we dont know whats on the right hand, side and so were just seeing that the trend is up. Lets keep buying these levels, so continuing to buy market bleeds. This time, ive learnt from the mistakes of the previous time lets not sell out just yet look at these big volume bars with the reversals, and this is going to come into play. What to what were seeing today so thats. Why i go back to this period? Show you real time examples within my retirement fund smsf for aussie guys and the lessons i was learning through 2017 using a similar sort of plan. Dollar cost averaging in lets get into the market because were in a bull market continue to buy now. At that point, i dont think i bought anything more because the market really started to get quite steep hard and fast, so that kind of threw me off plus, maybe we just dont – have the funds. I dont remember exactly at the time, but theres only so much. You can put into the market before you run out of funds, so this time were up back down. Didnt sell anything thats what thats the way it was. I did not sell anything you can see it here and then continue to buy on the bleed down again, because we had lasted a year over here market just going straight down, so the lows are starting to come in im buying some of these lows here.
Didnt get any more started to buy on the breakout, and then we can start to see that the rest is history. Weve come all the way to the present day. You can start to see some sort of similarities where we have some big bars down the end of these cycles. End of these runs some big volume coming into place, similar to what happened in may, but the tricky period is then waiting out. The the next stage is this: the accumulation or is the distribution its only after the fact that you can tell okay, it was accumulation, we got a big run up and the market continued to go. So maybe we will have to have some patience here, but it seems to be, while were in a macro, bull market. The best opportunities to be buying are on these major dips when it is, of course, extremely fearful were in extreme fear. Now now we dive into the juicy part and ive gone through blow by blow day by day and labeled out the differences or the pieces of the puzzle when it comes to the wyckoff analysis. Of course, this is my opinion of how it has played out, but i do this so that i can feel a little more confident in when im buying and selling, and so we have the distribution period, and i know some of you guys as well have come To know this analysis pretty well and youre, making comments about it, so its really good to hear that in the comments and, of course, on twitter as well.
The major thing we want to know here is: are we in an oversold or an overbought, so were going to get marked up soon because weve been oversold or are we going to get marked down because weve been overbought at the very basics of it, thats, essentially, How the price cycle works according to wyckoff, and i dont think theyre gon na youre gon na get too many people. That would disagree with this. If its oversold time to accumulate, we take all the supply off the market that drives up demands, and then we go through the same cycle again theres too much demand. It gets. Overbought more supply comes in because well, prices are higher. Lets sell off take some profits from the people who are buying at the lows. You can look back similar to what im looking at here, but its just the patience game. You know how many years i was buying in at the lows and just waiting for it. So, im giving this as some sort of encouragement, if youre finding yourself in a tricky situation at the moment, so lets just look at the blow by blow plays here the analysis looking at some of the terms. So these are the wyckoff events. Preliminary support, selling climax automatic rally so p s s c, a r thats coming to the present day, thats, where im looking at here, but taking a slight step back looking at the distribution, we have preliminary supply, buying climax automatic reaction, secondary tests, sign of weakness and Then finally, our up thrust after distribution, so we still have some last point of supplies as well, its always about supply at the top, so psy preliminary supply so were seeing here, then we have the buying climax into a peak the automatic reaction, the st standing for A secondary test, and that of course means it has to be a little weaker than the buying climax and its all noted here as well.
Volume and spread should thus decrease as price approaches. The resistance area of the buying climax – and i know this gets kind of dry, but if you can take the time and go through it piece by piece, it really starts to make a lot of sense so again, secondary test as an example wont go through. Absolutely everything, volume and spread should thus decrease as price approaches, the resistance area. So prices are approaching the resistance area, the supply you can see at the bottom, which is the volume this is how they work together, is decreasing and were also looking for the resistance area. So the volume and the spread, so the spread is the the the price. So how far the distance is so the spread is small on this bar here, the 24th a little smaller again, weve got 25th, so its slightly larger than the 24th, but overall its a smaller, smaller spread. Then we get the sign of weakness, the drop. So these now become our support zones. These yellow horizontal lines same with our resistance zones, which is the buying climax. We get the up thrust into the last peak here, so it does go a little higher than the buying climax but again its weak. It comes back into the trading zone last point of supply. You can see the market start to climb, even though its low volume try to climb as a little bit of supply here and then get swiftly rejected.
Higher volume dropped knocked back down into another sign of weakness. Last point of supply. You can see the the pattern forming again. Basically, the little rally here, less volume, less volume it doesnt make it back, hits resistance falls back again and it gets a few signs of weakness. A few last points of supply, and eventually we get the phase e signal, so it leaves the trading range. We had one attempt here to leave the trading range and it came back in and then we finally left the trading range now this is happening a little quicker than it did in may so i suspect its going to be a shorter wyckoff accumulation phase than what We saw through here could be wrong, but thats what im looking at at this point in time, we saw about 35 days down into the low of may and 97 in total at the moment, were about 24 days down into the low that we just had on The weekend on the 4th of december – and it looks like – were switching from phase e to phase a of an accumulation zone. Now, if this goes into a v shaped recovery, then of course this is going to play out much much quicker and then maybe we look at something thats similar to what we saw in 2017, where we had a big peak here and then we dropped off and We basically got pretty reasonable v shape, as you can see there recovery with a few of these playing out quite quickly, so it is possible, but if we dont get there, then at least we we have our plan.
So, looking at the final letters here, we have ps preliminary supply, so that is breaking down part of phase e of the distribution potentially could be wrong on this one, but it doesnt really matter, because i see that the final bar here on the fourth is one Of the selling climax bars, we could get a, we could get multiple selling climaxes, but at the moment we have one very significant selling climax here 24 days down and it looks like were getting an automatic rally just like we had an automatic reaction. This is also an automatic reaction to the upside. You get it to the downside when youre high up in the distribution section so maybe were in the accumulation, now probably get a secondary test, just like you do when its in a distribution phase and ill be looking for this to see where it comes in. Do we get it testing the low a little further down? Thatll give us some other signs of strength, and the next stage is to be prepared for the next phases of the accumulation, and then we can start to see whether the secondary tests come in. If we get some more reactions, some more supply drying up and go through the phases, as per the accumulation schematic one more point on the wyckoff events. We dont have to see these play out at every single point in the market. Remember wed still have a markup and a markdown, so within these periods we may not see any of these sorts of accumulations or distributions play out, but at some point they generally appear and thats our signal to either sell out or to buy back in now.
If were doing, all of this trading would be helpful to have a software where that helps with your cryptocurrency tax tracking, so check out the link below as well. This is for acquainting.com and while youre down there, of course, there are the links for patreon to where you can learn more about trading cryptocurrencies and investing. And, of course, the self managed super funds for the aussie guys so thats, where im sitting at this point.