Nick from Cheeky Crypto discusses the Bitcoin distribution schematic and analyzes its relevance to current market conditions. He presents two schematics for the Wyckoff distribution and discusses the role of liquidity in price movement. He then examines whether Bitcoin is following the Wyckoff distribution pattern, discussing the various phases of the pattern: BC, AR, ST, S, and UT. Finally, he explores potential scenarios based on the distribution schematic.
Distribution Schematic Analysis
The Wyckoff distribution schematic is a technical analysis tool used to identify the accumulation and distribution phases of a market. The schematic is divided into five phases:
- BC (Buying Climax): A sharp rise in price followed by a sudden reversal, indicating that sellers are taking control of the market.
- AR (Automatic Rally): A brief rally caused by short-covering and buying from uninformed investors.
- ST (Secondary Test): A test of the previous support level, which may be broken if sellers are still in control.
- S (Spring): A sharp decline in price, followed by a brief rally as buyers attempt to defend the support level.
- UT (Upthrust): A final push higher before the price breaks down to new lows.
Bitcoin’s Wyckoff Distribution
Nick notes that Bitcoin’s price action in recent months has been somewhat similar to the Wyckoff distribution pattern. However, he cautions that it may take some time to see if the pattern is accurate.
Based on the distribution schematic, Nick outlines two potential scenarios for Bitcoin:
- Scenario 1: Bitcoin breaks down below the current support level and enters a new downtrend.
- Scenario 2: Bitcoin rallies above the current resistance level and continues its uptrend.
Nick encourages viewers to share their thoughts in the comments and subscribe to the channel for future updates.