Bitcoin is down to the $30K range today, dropping almost 50%. Most other cryptocurrencies have fallen with it. Long time holders of these assets have seen worse crashes, so they’re not discouraged. However, it is possible the months-long bull run, consolidation, and plunge have been a manipulation by high rolling “whales.” In this YouTube video by Ivan On Tech, Ivan interviews a fellow YouTuber CTO Larsson Invest, and they discuss the Wyckoff Distribution. The distribution is a very old analytics model that explains how big-time investors fleece smaller retail traders.
The Wyckoff Distribution is named after Richard Wyckoff, who was active in the stock market in the turn of the 20th Century. According to Stockcharts.com, “he dedicated himself to instructing the public about “the real rules of the game” as played by the large interests, or “smart money.” In the 1930s, he founded a school which would later become the Stock Market Institute. The school’s central offering was a course that integrated the concepts that Wyckoff had learned about how to identify large operators’ accumulation and distribution of stock with how to take positions in harmony with these big players. His time-tested insights are as valid today as they were when first articulated.”
Wyckoff developed a 5 step approach to picking stocks, a heuristic device called the “Composite Man” for being in the optimal investing mindset, 3 laws of analysis, and more. You can learn more in Stockcharts.com’s article (“The Wyckoff Method: A Tutorial”).
In the video, Ivan and CTO Larsson examine the Bitcoin price chart and how it perfectly matches the Wyckoff Distribution. In this case, the whales, who are wealthy individuals and institutions, bought into Bitcoin heavily, creating excitement, and a rush of retail investors to buy as the price rose. During a period of consolidation, there were tests to see if the price would go higher or if people would panic sell. After just the right number of tests, the whales trigger a panic and short Bitcoin on the exchanges.
The video concludes with common sense advice to be cautious when investing, never risking more than you can afford to lose. Cryptocurrency and blockchain technology are still very new, so the serious investors are in it long term. Below the video are links to Ivan On Tech’s resources, as well as my own referral link to iTrust Capital. You can start a retirement fund based on cryptocurrency and precious metals, and you’ll support my blog in the process.
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