BTC/USD: Technical Outlook, Edition #15 (07/06/21) - Wyckoff Special Edition

Are you trying to understand Wyckoff Schematics, Fake-outs? Let's tackle advanced price-action analysis for the BTC/USD in this edition

Bitcoin nears its twentieth day of consolidating inside a triangle-like pennant, ranging around the mid-30K USD zone.

There have been many fake-out (false breakout) attempts throughout this consolidation. Before we go any further, here's a simplified walkthrough of how fake-outs occur:

  1. Lure in and trap liquidity on either end (i.e. long, short)

  2. When volatility picks up - SQUEEZE 

  3. Clear positions before the next move

The result? 

Market participant's stops are engaged, causing a domino effect of mass liquidations

Coordinated FUD (Fear, Uncertainty, Doubt) can exacerbate the already precarious position of over-leveraged traders. This pessimistic sentiment can act as the catalyst for inflaming market volatility to new levels. 

When mapping out the next random walk BTC/USD decides to embark on, it is essential to consider the plausible possibilities. So let's explore them below, starting with the highest time frame and finishing with the lowest:

Weekly (W1) Chart: 

However unlikely this gigantic bearish head and shoulders may be, it may still occur if the bulls' lose support at the USD 30K neckline.

Daily (D1) Chart: 

One can see the symmetrical wedge forming on the daily (D1) charts. Nevertheless, aside from the 4-hourly (H4) fake-outs, the pennant still looks neutral and intact. 

A break to the upside would offer the bulls an opportunity to push BTC/USD as far as USD 46K, where many trapped buyers are waiting to get out at breakeven. Conversely, the bears will have the chance to swipe BTC/USD down to sub-USD 30K, or lower, should the macro 0.5 fib retracement level break down at USD 34K.

4 Hour (H4) Chart:

The H4 BTC/USD chart above is a little trickier to decipher. However, a comparison identifies some resemblance to Wyckoff Accumulation and Distribution Schematics - with Type 2 Accumulation or Distribution appearing to be the more synchronised of the four most-likely variations below.

Type 1: Distribution

Type 1: Accumulation

Type 2: Distribution

Type 2: Accumulation

See you again for the next update.

- q

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