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CRYPTO AND WYCKOFF ANALYSIS
The Wyckoff Method is an excellent tool to analyze crypto assets. Post your crypto idea here – Bitcoin, altcoins or crypto derivatives – and discuss it with the Wyckoff Nation. Both historical charts and current analysis are welcome. Share your thoughts, every chart is an opportunity to improve your tape reading skills!
Wyckoff Crypto Discussion vol V
Hi Alessio. What do you think about BAND?
Hi Alex, price is residing in a local trading range at the bottom of a larger structure. I love the fact that you have posted the BANDBTC chart too. The fact that we have on the BANDBTC chart a LH is not very bullish. It suggests that the Composite Man is not aggressively buying right now.
That said, supply looks very exhausted, and if the whole market this week have further up days, we can see here what we call “a technical rally”(supply is exhausted, price rallies on low demand). A technical rally would lead us toword the leve of the resistance, in this case $7.4. If you are looking for a scalp within the boundary of the range, I think it can work, but you have to monitor the tade on the 30min timeframe.
Hi Alessio, thanks for the weekly market discussion vids. I enrolled in the Tape Reading course and posted 2 ETHUSD charts to the Charts, Analysis and Trading Forum (the first Forum in the Forums list) looking for some feedback from a tape reading/volume & spread analysis perspective. It would be great to get your feedback there.
A flash update on Bitcoin here:
and.. and finally here is our new Wyckoff Crypto Discussion, our new weekly VLog totally devoted to Cryptos!
The Wyckoff Crypto Report vol. 32 is out
Bitcoin analysis, DeFi Perpetuals, YFI Balancer, PolkaDOT, YFI, AmpleForth
Alessio, is there a difference in charting altcoins using USD pair or BTC pair when doing crypto wyckoff analysis? I tend to find USD pair charts to be neater than BTC pairs, however if majority of crypto trading is happening via BTC Whales then perhaps BTC pairs are better? thanks
I have replied to your question in the new Crypto Report. Thanks for following us!
The Wyckoff Crypto Report vol. 28
Profit taking in the stock market, Crypto still holding the gains
Rotation in play. Bitcoin. DeFi Index
Crypto Indexes. Low caps. Mid caps. Large Caps. Bitcoin.
XTZ bullish scenario and Points of entry
Small cap Index (via FTX). 4h chart.
first of all thank you Alessio for all the reports. I’ve attended your webinar and I learned a lot, I’m starting the Wyckoff Part I course the next week and I’m so excited about it too. Love all the Wyckoff Analytics content. I’ll attach my bearish bias (even tho we are still in a bullish trend) so you can review it and help me improve. I only have 2 years and a half experience since my first touch with trading so my analysis may be so bad.
Also I’m wondering if the CME chart is better for the analysis? Are in this chart more institution footprints? Finally I want to ask you if we may treat low cap coins (that are not in the index) as shitcoins so if we see strength on the index we may look at this coins too or just the ones that are representing the index?
PD: The squares on the chart are places to pay attention to.
thank you, much love for your affair to spread valuable information
I am very glad that you have decided to enroll WTC.
In my experience, I have noticed that the volume signature of BitMex and Binance is more accurate for our goals, since institutions operating in this space use traditional crypto exchange as well.
On Bitmex, volume is still decreasing toward the support, a bullish signs for now. Let’s review together the price action:
-high volume at point 1: supply is present
– bar 2: effort to the downside, result to the downside. Selling is present but..
-..the selling has not produced a lower low for now. At point 3 we see a local increase of volume and price creates a Higher low. There is demand!
– 4 volume is decreasing but price is rallying and supply looks exausted. The downspreads are very small at point 4.
My bias is still bullish at this point.
However, a trader should always consider tactical scenarios, and the work that you have done is very good. Let’s raise the bar now andet’s define bearish/bullish levels, points of dangers not only looking at the structure, but also looking at the volume.
Let’s look at the area indicated by the blue square: this is the level where the last significant selling has occurred. If you are bearish, you shoud expect a bearish behaviour when price revisits this area (for example high effort to the upside, low result = selling!) followed by a reversal confirmation.
You can definitely compare small caps to SHITPERP that are not included in the index. Also look at the DEFIPERP and the new index UNISWAP-PERP, these are thesectors that currenlty show a lot of momentum.
Hi Alessio, thanks for the weekly report. A few other scenarios in my chart attached.
I’d appreciate any feedback.
By the way, what are your thoughts about the Gold & Silver price actions? The Silver futures volume on Aug 11 is the highest ever (higher even than the volume at the blow-off top in May 2011). Extended consolidation coming up in the previous metals potentially?
Hi dragonfly, thanks for your kind words, glad you are enjoying our reports. I have just posted the bullish scenario for Bitcoin in my reply to Ethox, let’s see how the price action will develop in the next days.
Gold and silve are now consolidating and need to rest a bit and digest the supply emerged at these levels, but the long term bias is still up, we are in a multi-year accumulation.
Bitcoin very often tends to be correlated to Gold, however think of the rest of the crypto market: low caps and midcaps still do not present signs of significant supply, and the DEFI-PERP (the index of DeFi assets) show a very, very interesting picture.
This is a preview of a chart that we will discuss in the next days. PnF counts add another layer to this analysis.
When Bitcoin is lagging, always look at the leading sectors…like SH*TPERP, DEFIPERP and UNISWAP-PERP. They will will help you to define the trend of the market.
Thank you for your analysis and the new weekly reports, Alessio. The selection/RS game is great. I’d love to see more of those.
The Wyckoff Crypto Report vol. 27 is out, you can read it here:
Bitcoin. S&P. 4D chart.
Bitcoin Trading Diary
Crypto Sector Analysis.
Point and Figure / Effort versus Result
These last 3 daily bars seem constructive. Would they confirm a jump across the ceeek? Or is more volume and price spread needed to confirm that?
Thanks in advance for everyone’s time and contributions here.
Hi pmpaulmc, let’s think in terms of horizontal levels, effort and result. The last area in the range where supply has came in and produced a significant move to the downside was the $9600 level (dotted line. 1). After the selling that came in at that level, we have seen shortening of the downward thrust. The reaction at point is a HL on very low volatility, a sign of absorption. Now peice is pushing through the $9600 level, and we see three bars with increasing volume but slighly decreasing effort to the upside. The last downbar is quite small. We have two options:
a) high probability. Absorption continue on the way up and price accelerate toward to the $10K zone
b) low probability: price can’t commit above this resistancea and fails here.
Today’s price action seems to confirm the absorption scenario.
Sold at $11,100….. 22% up from apex breakout entry point…..waiting for next accumulation/ distribution setup to identify
thanks again for all the education and insight here.
Thanks for the excellent visual explanation. Appreciate the time and feedback.
Eth, the digital silver – moving at 4x the speed?
Yes, spectacular analog. Also the ETHBTC charts is very interesting.
The Wyckoff Crypto Report vol. 25 is out, you can read it here:
Bitcoin. S&P. 4D chart.
Crypto Sector Analysis. Daily chart
Micro Caps. 4 hr time frame.
Q & A
Gold vs Bitcoin. I think, it looks interesting.
Hi, Alessio. What do you think about this two charts? May/June 2019 vs May/June 2020.
Great job, kuznasson. I like the way the last upthrust action has created a HL for now.
Now, let’s go to the next level. Use the structural analog as a tool to find points of confirmation/failure of the bullish scenario.What we would like to see, in order to confirm the bullish case, is a series of tests on higher lows and decreased volatility: that would confirm that supply is exhausted. Good job!
Got it. Thank you!
The Wyckoff Crypto Report vol. 23 is out, you can read it here:
Topics: Bitcoin. Nasdaq. 4D Analysis
Bitcoin. Intraday 4HR
ChainLink (LINK) vs Nasdaq.
A special request: TRX analysis
Hi Alessio, Bruce mentioned at yesterday’s WMD webinar that he will talk with you on StockCharts TV about the crypto markets. It would be great if you can post the link of the recording or any other recording of your presentations/talks that are made available online. Thanks!
I will post the link the PowerCharting episode for sure. Ps. Hope to see you in our July classes!
Hi Alessio. Like your idea about XTZ and mid-caps in report 24. And what do you think about VET? On weekly timeframe it has a very clear structure, I think.
Hello kuznasson, thanks for reading. VET is an interesting asset, but when you look on the daily chart there is still a bit of supply on the last upbar. Let me show a similar chart, ADA. If you want to enter right now, the risk is extremely high. I think that the best solution is to look at lower timeframes and look for a scenario like this:
Hope this helps!
Hi Alessio, good to have you back this week. Very much enjoyed reading your recent report. I agree with your analysis, even though there has been supply coming in and the consolidation is taking its time, supply has been well absorbed at key support levels so far. Still bullish for now. However, I do wonder if the risk markets (stocks) start to fall back from a Buying Climax how Gold and Bitcoin will respond.
I am currently holding a LINKUSD long position. Could you share how you design your exit strategy (profit target and stop loss points)? I am trailing my stop about a few points (based on the recent average 4hour ATR) below the last significant daily bar (June 02 doji) and setting my profit target close to the previous all time high. I understand you also use significant bars as reference for setting stops. Do you use a different exit strategy for swing trades vs shorter term day trades? The LINKUSD rising channel indicates potential for it to reach a new all time high. Do you always use the PnF count to set the target or do you scale out (e.g. close out a partial position at the previous high and trail the rest expecting price to reach the top of the slope resistance)? I know there is no right or wrong answers to my questions. I am just wondering what you found works for you and since I am new to Wyckoff Analysis methodology, I am interested in learning the Wyckoffian guidelines for setting targets and stops.
Hi Jane, I have covered your question in the new Crypto Report. Thanks for following us!
Thank you Alessio, it’s much appreciated. Another great report. I look forward to the Wyckoff Cypto online conference next week.
Hi teacher, I really like your analysis, although my English is not very good, but I still follow it every week, please ask why there is no update this week
Hi baduwu, thanks for following us. Last week I was preparing a presentation for the TSAA-SF. Tomorrow the Wyckoff Crypto Report will be published as usual. I have seen the screenshot that you have uploaded, good labeling, however the big downbar labeled as UTAD could be a SOS too. I will discuss this scenario tomorrow in the report. In the meanwhile, here’s a screenshot from today’s price action: as you can see, the big downbar has not committed below the low of the previous upbar. High effort to the downside (high volume), low result to the downside (no commitment below the low of the previous bar). This price action suggests that buyers are still dominant for now. For this reason, the best tactic is waiting for the test of the supply and act on the confirmation. I will explain this in detail tomorrow as usual, stay tuned!
Thanks for sharing, I was very hungry to read up on it when it was first posted and here are my thoughts.
We know that after a weakness signal in price (this includes BC, UT and double K reversals), it won’t go too far unless Strong volume breaking through resistance. I see a decline on every rise, and in the down wave, volume is significantly higher than in the up wave, although showing some absorption signs, but overall still supply is negating the demand effort.
At the same time I find it confusing that when I’m communicating wyckoff with friends, each person’s analysis comes up with different results.
I’m using translation software, and in case the meaning is ambiguous, I thought I’d upload a picture to get the point across better.
The Wyckoff Crypto Report vol. 22 is out, you can read it here:
Topics: Bitcoin. Nasdaq. 4D Analysis
Bitcoin. Intraday 4HR
ChainLink (LINK) vs Nasdaq. Tactics
ChainLink (LINK) Bullish scenario. Confirming count
Ethereum (ETHUSD) 4h. Spread charts
Comparative analysis Exercise
Hi Alessio, thanks for another excellent weekly report. The LENDBTC spread chart is interesting. I have a few questions about micro caps.
1. There are so many crypto assets on the market. How do you keep track of the best performing crypto asset?
2. I haven’t had any success trading micros in the past as they are extremely volatile and most of them also only trade against ETH and BTC which could translate into exponential losses in dollar terms. Do you have any risk management suggestions you can share with us regarding micro trading and which exchange other than Binance do you recommend is a good platform to use?
3. What is your selection criteria for deciding which crypto you will or will not trade e.g. do you use filters taking into consideration of liquidity, fundamentals (i.e. what is the function of the crypto and user adoption etc)?
Hi Drag0nflai, good questions.
You always want to look for the asset with the best relative strength. Here is a screenshot with some material that I am preparing for a free Wyckoff Event on Cryptos in late June. Screeners are very useful to identy micro caps. Bitscreener is a good platform that I have used in the past, I recommend it. Generally, it’s a good habit to restrict your universe to the top 100 capitalization cryptos. Crypto assets on Binance and Huobi, FTX have good liquidity.
We will cover this topic in the next reports, stay tuned!
Hi Alessio, thanks for your weekly report once again and thanks for responding to my question. I have also used Bitscreener. It’s good. I am not a paid Stockchart member. Is the gallery view of the major cap charts freely available on Stockchart.com? Your trading plan looks good. I look forward to reading more on this topic in the next report. Apart from relative strength analysis, I am interested in your thoughts on risk management with regard to trading micros.
In terms of the broad market overview, I also look at the COT report/chart and use this site: https://www.tradingster.com/cot/futures/fin/133741. Since the March sell-off, CME open interest climbed to an all time high a couple of weeks ago. It’s fallen back a little since.
The Wyckoff Crypto Report vol. 21 is out, you can read it here:
4D view. Bitcoin and S&P
Long term accumulation. The Wyckoff Story
Daily Perspective. Bar by bar analysis
Trading diary. Supply-absorption-feather-acceleration
Historical analogs. 2017. Bitcoin and the”exogenous” shock (request by Dragon0flai)
Thanks for giving us more details on the feather pattern. I also very much enjoyed learning from your Trading Diary and the 2017 analog. Another great report, thank you! The ability to read the subtle changes of the volume signature in conjunction with price actions is something I am still learning. In the recent Anatomy of a Trade vid (#33 Gold). Roman spoke about the characteristics of horizontal and vertical absorption and how volume signature may look like in these two 2 types of absorption patterns (around 15:30 into the vid). I thought that was great. Do you or Franz have the volume signature schematics for the different accumulation and distribution phases you could share with us?
This might be a silly question. Volume indicator bars in most charting software (I use TradingView) usually are coloured based on if a candle is closed up or down. As we know, the volume indicator captures the volume traded on the given timeframe. Green volume bar doesn’t necessarily mean demand and red doesn’t just mean supply. I am a bit confused about how to assess the supply and demand dynamics looking at the volume indicator. Could you or Franz shed some light on this for me?
Hi Jane, buyers and sellers are present on each bar. On a very simplistic basis, supply is dominant on a downbar, demand is dominant on an upbar. However, single bars are like the letters of a word in a sentence, or the notes of a melody. A single letter or a single note does not have a meaning. It’s only when you listen that note in the context of a melody, that note acquires a real meaning. Your brain instantly analyze the relationships between that note and the other notes that form the whole melody.
In the same way, when we study demand and supply, we analyze the “relationships” between the bars. Our parameters are: the spread of the bar, the position of the close, the volume. Look at the example below. On the left hand side of the chart we see a big downbar on high volume. Looking at this single bar, we can say that sellers and buyers were very active, and sellers were dominant. However, it’s only when we put this bar in the context (right hand side of the picture below) that we extract the information. In this case, volume increases on the second bar (effort to the downside increases) but the result to the downside is poor. There is a hidden force on that bar that limits the price to go down more. Buyers were active on that bar. The next two bars confirms our suspect.
Ps. I strongly recommend to watch for free the first lesson of the Wyckoff Trading Course:
Hi Alessio, thanks for responding to my question. You explained it very clearly and well. I really appreciate how you provide examples/case studies when answering questions. Thanks also for another excellent weekly report. I will definitely check out the Wyckoff Trading Course video.
Hi Alessio, can you recommend a primer on the mechanics of how to buy and sell cryptocurrencies please? Thanks. Last week Paul Tudor Jones was quoted comparing crypto to gold in the 1970’s. A big successful hedge fund manager talking up crypto is bound to attract more institutional attention to the asset. Thanks for your great reports!
thanks for reading! I agree with you, Paul Tudor Jones’s public endorsement for Bitcoin is very interesting.
As for your question, I would recommend Kraken.com for US-based traders. It’s a San Francisco based crypto exchange founded in 2011. Simple interface and good liquidity. https://www.kraken.com/
Here is a ten minutes video tutorial https://www.youtube.com/watch?v=BgpvBifKkgM
Instead, if you are interested in the OTC market, Grayscale is a very big player in the space and offers three instruments: GBTC (Bitcoin Trust), ETHE (Ethereum Trust) and ETCG (Ethereum Classic Trust).
The Wyckoff Crypto Report vol. 20 is out, you can read it here:
3D view. Bitcoin and S&P
Daily Perspective. Bar by bar analysis
Relative Strength Ratio Bitcoin : S&P. Breakout of the downtrend channel.
Bitcoin Point and Figure analysis
Ethereum – Bitcoin. Institutional Profit taking.
…and a new crypto exercise for intraday crypto traders. The solution is in the blog.
Excellent analysis, thank you Alessio. I would also like to see more relative strength bias games and learn more about RS analysis and scanning techniques.
Thank you, Jane. Relative strength is extremely important in the crypto space. I will publish more examples of comparative analysis in the next Crypto Reports. Thanks again for your suggestions.
Hi Alessio, love the bias game. The relative strength analysis you marked out on the 4 hour intraday charts is gold. I have a question re  on the XBTUSD chart, you wrote: “Supply comes in again on the same level, but the result is slightly better. A bullish feather confirms the absorption is in play.” I have not come across bullish feather as a candle or chart pattern before. Are you referring to the series of low spread bars pushing up against resistance with diminishing volume? Could you please tell us more about the bullish feather and any other pre breakout absorption patterns (incl. volume profile) to look out for? Thanks!
I just read through a few previous posts and found Frantz Herr’s post on April 5. The points from David Weis’ book ‘Trades About to Happen’ summarize the pre breakout absorption patterns extremely well. Do you have anything to add? The only other signal I can think of is a recent past fake out indicating strong price rejection at the other extreme (e.g. a spring in the support zone of the trading range).
Hi Drag0nflai, glad you enjoyed the RS analysis.
Feathers are powerful continuation patterns, however it’s extremely important to be sure that the”background” of the absorption is bullish. Sometimes price can show signs of temporary absorption after selling has occurred. In these cases, the feather pattern pushes prices back to the area where selling has previously occurred, but then fail. The rally sponsored by “weak hands” fails to commit above the specific area where selling has occurred. Let’s see this example from the current market. At point , we see a classic feather. Absorption is present at point  as well (HLs on decreasing volume), however you have to focus on what has happened on the bar preceeding the feather. Look at the heavy selling that preceeds the absorption pattern at . There is definitely selling in the background., at least in the short term. Absorption takes place, but what’s the result? Price is not able to close above the significant level indicated by the dotted line (the upper half of the big downbar where selling has taken place). Thank you for reading,
Thanks Alessio, excellent example. Yes I agree that the recent price action signals a change of character and the importance of analysing any patterns in the larger context.
I have been reflecting on what you wrote about the ETHBTC chart – “The spread chart Ethereum / Bitcoin is a good indicator of the “speculative” sentiment of the market. When a distributional pattern is spot on the ETHBTC chart, institutions have locked in their profits, anticipating some short term weakness”. I found that when a rally is coming to a point of exhaustion, alts in general (incl. ETH) may either take a much sharper fall than BTC or they may continue their parabolic run when the Alt/BTC spread continue to rise depending on the risk sentiment in the market. In the former case, usually the prior move up is more measured with possibly greater institutional participation (e.g. in the 2019 rally from early April to June after recovery from a prolonged downtrend). In the latter scenario, there is often over exuberance demonstrated by micro caps going parabolic; Fear & Greed index showing a high level of greed and futures basis reaching a historical high (e.g. at the market top in Dec 2017 and more recently in Feb 2020). In this second scenario, alts & micro caps can continue to go up outperforming Bitcoin until the BTCUSD distribution TR well and truely breaks down. Considering that global stock markets are going into a risk-off mode at the end of last week; the BTC fear & greed index never went into the greed territory in the recent run up and futures basis stayed low, it is likely that alt coins will take a sharper fall than BTC if the correction continues. I will be keeping an eye on the BTC dominance chart.
The question is how to express this view. It would be great to hear your thoughts on this. I am thinking either short the ALT0626 futures contract or put on a ALT0626/BTC0626 short spread. Do you take pairs and calendar spread trades? The other alts in the ALT index seem to be weaker than ETH. This is why I am considering to short ALT.
Great observation as usual. Rotation and relative strength is a hot topic, I’m thinking of writing more and more material on this. My personal preference is to incorporates spread trades as a tactical tool into a comprehensive strategy. Let’s consider the case of the last week. You have 3 kinds of positions at the same time:
– a big, long term long position in Bitcoin opened near the March lows. You simply raise the stop loss until a Change of Character breaks the uptrend. Winner
– small size intraday positions. You see a low risk point entry on the intraday and you ty to catch it right away. On the intraday level, you have to accept more frequent break even trades and small losses. It’s a part of the game. Low risk is the key. Always pick the outperformer. Long the stronger asset, short the weaker asset. Think of Relative strenght / Comparative analysis as a filter that increases your profits on winners and reduces your losses on the losers.
-When you spot clear accumulation / distribution patterns on spread charts too, you can consider a small ALTBTC position that work as a hedge. Let’s say that you were short term bearish last week. Altcoins were definitely underperforming. The ETHBTC had a distributional formation at III. The distributional formation suggested us that in the bearish case the selloff will be heavier for ETH. If Bitcoin continues to the upside, ETH would continue to underperform. A win / win situation. Let’s come back to your portfolio now. The first position (long term bull on Bitcoin) is in profit. On the intraday, you have a break even / small loss. In this case, an ALTBTC short has worked as a “hedge”.
Ps. The circled rally on the ETHBTC shows now a Change of Character. Let’s see if a “cause” forms on the Relative Strength chart.
Hi Alessio, thank you for your detailed reply and another excellent weekly report. The opportunistic tactics/intraday trading diary and the historical analogue are both gems, so is the supply-absorption-feather-acceleration pattern details.
Early last week, I opened both an ALT0627 short (I trade futures on FTX) and a ALT/BTC spread position, experimenting with different strategies. I agree with what you said. In fact as I have a long term bullish view for Bitcoin, I have a long term position that I add to at market sell-offs e.g. at the March low and 2 days ago (only small amounts at a time). I plan to only liquidate my long term position if there is a shift in the macro fundamentals. My objective for taking spread trades is to generate some profits to lower the cost base of my long term position. The ALT naked short is more of a hedge as it hedges part of my long term position. I can’t see how the ALTBTC short could work as a hedge.
Retrospectively, when I went through the most liquid alt futures on FTX, I realised the best relative strength play would have been BCHBTC short, taking the entry shortly after the BCH halving event in April when the technical setup presented opportunities. I had a BSVBTC short about 1.5 weeks ago but took profit too soon. Also I did not quite come to the right conclusion when assessing the alt coin relative strength. I have a long way to go with regard to entry/exit timing and relative strength analysis. Look forward to learning more from you and the Wyckoff community.
Here is the continuation of the “feather” discussion we had last week. I have included this material in the new Crypto Report.