Indeed, one of Wyckoff's rules to understand price movements in individual stocks is to acknowledge the existence of the Composite Man (mostly known as "Whale" here):
“…all the fluctuations in the market and in all the various stocks should be studied as if they were the result of one man’s operations. Let us call him the Composite Man, who, in theory, sits behind the scenes and manipulates the stocks to your disadvantage if you do not understand the game as he plays it; and to your great profit if you do understand it.”Thus, the point of this topic is to highlight "whales" practice to the vast majority that could then earn more benefit from BTC trades (or at least not give their cheap btc to whales). This is done in the goal to continue Wyckoff work in introducing the public to the "smart money". This post would be make short, and not all relevant data would be covered in order to not lose the reader (in his/her interests, only accumulation events will be covered directly, not phases). For more information, you can use this
link.
Comparing the accumulation events of Wyckoff with the Bitfinex BTC chart using 3day range allow us to highlight each events :
Now, let's describe each events of the accumulation phase:
-First, the preliminary support (PS), is a signal that the down-move may be approaching its end (we were consistently decreasing from the previous high of 1000$). Indeed, as you can see, buying pressure finally surge on an increased volume (nothing comparable in the previous month in term of volume).
-Then, we got the selling climax (SC), lowest point in the downward move caused by heavy panick selling (look at this huge damn volume for that time). The bad news is that all of those cheap bitcoin have been bought by the Composite Man, here again a smart investor (oh dear whales). Indeed, the price closed much higher than the bottom of that candlestick, showing that there has been some big buying pressure.
-Now start the Automatic Rally (AR), which is logical since supply force are almost inexistent, most of the people have sold their BTC, and the one that didn't will hardly do so. Notice that the top of this rally will define the upper boundary of the accumulation trading range.
-ST goes for secondary test. In means that price revisits the SC area to test the supply/demand balance at those level. If a bottom is confirmed, you should be witnessing a decreasing volume and price spread as the market approach support in that area (damn true exept at the end, which is explained in our next event).
-Now I forgot to mention it in the graph, but it looks like our whales have been really good in that phase. Indeed, both a shakeout (beginning of july), and a Spring (around August, September) occured, misleading the public and so allowing our smart investors to acquire additional shares at a bargain price.
-After that, the large operators "test" the market and its supply force. If they face considerable supply, they'll need to acquire more BTC at these price and get rid of their competitors, if not, the price can finally start increasing.
-Now, notice how the volume increase as the price goes up around october, this is the sign of strengh (SOS) event. Sadly, the whole accumulation phases looks obvious at this point, but it still time to get some cheap btc.
-Indeed, the last point of support (LPS) is a pull back to the previous resistance level that is now the support level (last time to get some cheap btc for that ride folks!!).
-In our case come finally the "back-up" event, caracterised by both short-term profit (higher points/resistance) and a test for additional supply (area of resistance). It looks obvious now, but this back-up element precede another price mark-up.
So what now ? We are entering the phase E. Demand is now in full control, and again, the mark-up is obvious to everyone. Setbacks like shakeouts can happen, but are short-lived. We could now enter a new Trading Range including both profit taking and acquisition of additional shares (can be called "re-accumulation") by our whale friends, or now that you are aware, you!
Hope that this will help you to understand the market and not get f*ck by short-term swings (which we damn know are common in btc).
Sorry for the bad english.
EDIT:
for the next step idea ...
