bitcoin Bitcoin enthusiasts are celebrating, but skeptics see dark clouds ahead

Happy days are here again in Bitcoin-Land. Champagne corks are popping, and the partying might go on for days. The world’s favorite digital asset has just recorded its third largest daily gain in history, risen $2,000 from the depths of despair, and despite a round of profit taking, it has not backed down one bit. Everything is great, or is it?

When everyone is smiling, there always has to be someone in the crowd with a frown on their face. In this case, one “buzz killer” was moved to utter: The spike could simply be a throwback according to Wyckoff’s distribution model, which would suggest that the rally is not only over, but that the real markdown phase will begin next.

Other skeptics soon joined in, but are there really dark clouds ahead?

What in the world is “Wyckoff’s Distribution Model”? According to Tony Spilotro over at NewsBTC: “Richard Wyckoff was a stock market trader and editor of the Magazine of Wall Street. His work was focused on the logic behind market trends and developed the “Wyckoff Method” as a means to determine certain phases an asset may be trading in. Wyckoff market cycle theory breaks down trading activity into four distinct phases: accumulation, mark up, distribution, and mark down.”

A popular Twitter analyst with the handle of “888Velvet” resurrected Wyckoff’s “template” and apologized at the same time for spoiling the fun: “I’m sorry for not being bullish like everyone else. I guess somebody has to be the bear right? or at least have a Conservative approach. Here is something to keep in mind among all the bullish and hopium charts.”

“888Velvet” or whatever his name truly is believes that the early part of this year up through April was a classic case of accumulation for Bitcoin investors. The parabolic move, which was to follow and which culminated in a near $14,000 high, was also a textbook “Mark Up” phase. From that point on, investors have been in “Distribution” mode, another name for profit taking, which resulted in the lengthy declining channel from late June until today.

And then the “pump” occurred, as the analyst has described Bitcoin’s massive move over this past Friday and weekend. At this stage of the analyst’s interpretation of BTC price behavior, he asks for your indulgence: “The pump may be nothing more than an extremely powerful throwback to retest resistance of the distribution zone, before falling further and kicking mark down into high gear.” How much of a “mark down”, you might ask? In his accompanying chart, his declining wedge goes down to $3,000… GULP!

This velvety analyst is not the only one trying to mess with the current festivities. Peter Schiff, founder and CEO of SchiffGold, economist, and devout member of the “Old Guard”, has never missed an opportunity to slash out at all things crypto. He cannot accept that a single utterance from China could ever lift Bitcoin to such heights. He contends that a major “Whale” snookered the market into “FOMO” so that he could unload a lot of high priced coins in his portfolio, market manipulation at its finest.

If you buy into what Schiff has to say, but do understand that he is appalled that anyone would ever compare BTC to his precious yellow metal, then Bitcoin must fall like a stone in the coming days, after the ephemeral “pump” deflates, as he expects. There are also other critics that point to the descending channel and claim that Bitcoin has not “escaped its clutches”. Once again, these folks point south, as you might expect.

Bitcoin is quickly forming an alliance with religion and politics, as a topic that is not to be discussed in public for fear of the chaotic reactions it might incite. In any event, before you liquidate your Bitcoins, accept that all cryptos rose with this recent tide. A full $55 billion of new capital entered the crypto fray, and we do not know of any retail traders that have that kind of cash lying idle. When institutional investors move that much capital around, they usually know what they are doing, regardless of any velvety protestations.

 

The post Bitcoin enthusiasts are celebrating, but skeptics see dark clouds ahead appeared first on LeapRate.


Bitcoin enthusiasts are celebrating, but skeptics see dark clouds ahead was first posted on October 30, 2019 at 12:54 pm.
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