New?! Bitcoin rate prediction by Wyckoff method
The cryptocurrency community has seen another wave of discussion about bitcoin's prospects. Food for thought was given by the post of user CryptoPorto, published on the Reddit platform, which discussed a new forecasting method based on the Wyckoff method.
More about the Wyckoff method
According to the published the post, the dynamics of the pair BTC/USD develops in strict accordance with the diagram based on the Weikoff method, which precedes the reversal of the current trend.
The Wyckoff method focuses on predicting the movement of a publicly traded asset based on a series of market scenarios and laws.
The three whales on which the Wyckoff method stands are:
- The law of supply and demand - It is used to determine the direction of the price of the asset.
- The law of cause and effect - is necessary to determine the influence of some significant events on the direction and speed of price.
- The Law of Force - adds the influence of trading volumes to the price direction calculations.
Despite the fact that the method was developed in the early 20th century, Fortrader.org experts remind that it is still used by many analysts for technical forecasts in financial markets, and Richard Wyckoff himself is one of the legendary figures of Wall Street.
Wyckoff chart and bitcoin chart
As you can see for yourself, BTC/USD pair chart is indeed similar to Wyckoff's chart in many places, and in some places it repeats it exactly. On this basis, a number of analysts argue that the bitcoin price will continue to fall for a while, but after that it will take off rapidly.
It should be noted that for the realization of such a scenario bitcoin rate will have an upward rally with obstacles in the form of several major resistance levels, the first of which, according to analysts Fundstrat, is located at $ 7,800 per BTC.
About those who are "against"
Similar bitcoin price prediction has not caused an unequivocal reaction in the crypto community. Along with optimists, of course, there were skeptics who consider the prospects of bitcoin's explosive growth a fiction.
As arguments, the most ardent skeptics make two basic assertions:
- If you search for a very long time on the charts for the coincidence of market situations and patterns, you can find an unimaginable number of them.
- Technical analysis of a financial asset can be easily adjusted to any market situation.
Other skeptics are not so adamant against the "stretching" of the technical analysis of the situation, but see the problem in Wyckoff's method itself. In their view, he weakly applicable to the dynamics of cryptocurrenciesbecause it was originally created for the stock market.
Since digital assets are traded 24/7, their pace does not correspond to the pace of the stock market, which means there are serious discrepancies with the timeframes used in the method, making the application of the classical laws of technical analysis on large time intervals for cryptocurrencies incorrect.
Conclusion
So far, it is quite difficult to say what exactly we are dealing with. Perhaps, the prediction of a sharp growth of bitcoin on the basis of Wyckoff's method is justified, in the near future the pair BTC/USD will go to conquer new price tops. Or maybe skepticism is justified, and optimists just see what they want to see behind a simple coincidence of a diagram and a chart, passing off the wishful thinking as reality.
For now, the first cryptocurrency enjoys well-deserved popularity among traders, allowing them to make good profits when trading bitcoin.