Wyckoff Analytics – Trading the Crypto Market with the Wyckoff Method – Free Download

In the last few months, Bitcoin and all other cryptocurrencies have been more or less trading sideways with a few bigger drops and pops. Many who have tried to enter the market when there were signs of a possible uptrend have ended up losing their money when the market has suddenly reversed.

The same has happened to those who have tried to avoid a bear market by selling in the few sharp drops we’ve had. If you are one of these two people and keep wondering why every time you think something is going to happen, the opposite thing happens, and that it is like someone wants you to lose money, then you need to read this article because someone is doing precisely that.

In the last few weeks or earlier, you might have read or heard about a term called the Wyckoff method. This term may not mean anything to you, and you maybe haven’t looked into it any further, but it is time for you to know what it is and how it affects your crypto investments.

Wyckoff Method Definition

Wyckoff Method is a strategic approach to trading.

The method is based on supply and demand.

Supply and demand is the basic dynamic at the root of market cycles. Richard Wyckoff, the method’s author, came up with patterns that simplify the analysis of market cycles.

The method was originally meant for stock markets. It is most useful on crypto markets these days.

Best Timeframe For Wyckoff

Wyckoff works in terms of supply and demand. This dynamic exists on any timeframe, but it has a bias.

It is best to start with higher timeframes.

Look for Wyckoff phases, establish the market bias, then look into details.

For initial analysis, the 1D timeframe is most recommended. It’s easy to get with TradingView FREE plan.

Wyckoff Phases

Wyckoff divides each market cycle into phases.

In each phase, the market has a characteristic direction:

  • Markup phase: The market steadily advances
  • Markdown phase: The market steadily declines
  • Accumulation, Reaccumulation and Distribution phase: The market ranges (moves sideways)

This post focuses on Wyckoff method for ranging markets.

We will focus on Accumulation, Reaccumulation and Distribution phase here.

Wyckoff Method in Crypto

Wyckoff method entered the crypto trading community thanks to John Bollinger, the inventor of bbands.

He also suggested combining Wyckoff method with bbands.

Wyckoff Method with Bollinger Bands

All you need to do to combine Wyckoff Method and BBands is to treat the lines in BBands as baselines.

Instead of looking for new lows or new highs in terms of price, you look at their distance from BBands.

This approach is great for ranging markets, as Bollinger described himself on Meb Faber’s show:

“Bollinger Bands work fantastic on Bitcoin. And they work fantastic on all forex. There’s a reason for that. Currency trading is pairs trading – you’re long one and short the other, essentially. The idea is to earn a return at reduced volatility over time. So, forex is pairs trading and pairs have a statistical property, they’re stationary or they exhibit in the statistical parlance, stationarity. And it just turns out that Bollinger Bands work just a little bit better with series that exhibit stationarity. So, there is sort of a built-in edge to using Bollinger Bands on anything that’s a pair.”

This approach is great for ranging markets, because that’s where the pair behaviour is strongest in markets like BTCUSD.

  • Ranging markets have lower volatility.
  • With lower volatility the market is more likely to stay inside the BBands.
  • It’s easy to measure how far any new lows or highs got from their side of the BBands.

We will go more into market ranges in the following section.

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