Since April 30, the Bitcoin price has been trading in a range between $10,050 and $8,500. The price movement inside this area is akin to the distribution phase of a Wyckoff distribution, meaning a breakdown from the range would be expected.

Well-known cryptocurrency trader @ColdBloodShill stated that Bitcoin is probably trading inside a Wyckoff distribution, but noted that distribution and re-accumulation phases are very hard to decipher, meaning a breakout or breakdown above/below the trading range would be required for confirmation,

Re-accumulation and Distribution ranges are the hardest to decipher between. Usually confirmation only comes at the end of the range. Clear seller control above $9.8k. Clear rising demand below.

Source: Twitter

We previously discussed the possibility of a Wyckoff distribution in this article, so now is a good time to revisit the movement since then.

In that article, we defined the Wyckoff distribution as ‘a period of consolidation, which occurs after an upward move, serving as a way for market makers to sell their positions at the desired prices. After this period, the price normally breaks down from the previous range at an accelerated pace.’

Bitcoin Trading Range

Since April 30, the Bitcoin price has been trading in a range between $8,500 and $10,050, with the exception of a high on June 1, after which the price decreased immediately. This is a bearish sign since the higher prices could not be sustained.

The volume pattern is bearish since volume has been consistently decreasing, even though the price is clearly in an uptrend, making higher-lows as evidenced by the ascending support line (dashed) below. Furthermore, yesterday’s breakout occurred with average volume.

For the bearish possibility to remain intact, BTC would have to be rejected either at $9,900, the closest resistance area, or $10,050, the range high. While it is possible that BTC makes another high above this range,  called the ‘Upthrust after distribution,’ that is less common, and would not fit with the long-term movement, which we will discuss in the next section.

A breakdown to $8,500 would confirm the bearish pattern, and could even take the price back below $7,000.

Bitcoin Wyckoff
Bitcoin Chart By Tradingview

Long-Term Movement

The long-term chart reveals three more reasons why a breakdown from the range is more likely:

  • The long-term descending resistance line that has been in place since the all-time high of December 2017.
  • The $10,300 resistance area that rejected the price in February 2020 and November 2019.
  • The ascending support line that had been in place since March 13, from which the price broke down.

Therefore, in order for the price to continue moving upwards, it would have to move above both the descending resistance line and the $10,300 area. This scenario is even less likely due to the fact that BTC has broken down from an ascending support line.

Long-Term Bitcoin Movement
Bitcoin Chart By Tradingview

The post Bitcoin Approaches Crucial Point in Wyckoff Distribution appeared first on BeInCrypto.

Source: Be In Crypto