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By examining a well-known technical component, the popular YouTuber The Moon believes that Bitcoin could be heading towards $6,000 in the next few months if it breaks the vital $8,500 level.
Bitcoin And The Wyckoff Distribution Pattern
The cryptocurrency analyst initially posted the chart on Twitter in which he has inserted BTCâs current position on the Wyckoff distribution pattern. It works as a medium-term technical instrument that begins in a preliminary supply stage (PSY) where the assetâs âvolume expands, and price spread widens.â
Wyckoff Distribution Pattern. Source: StockCharts
The âPhase Aâ marks the âstopping of the prior uptrend.â In Bitcoinâs case, this came in late April and early May when the asset was recovering from the March lows. The âbuying climaxâ appeared afterward, followed by the âautomatic reactionâ (AC) that brought BTC down and a âsecondary testâ (SC) of the BC, which spiked it back up.
âPhase Bâ is the most extended stage of the development of the distribution pattern. Its purpose is âto build a cause in preparation for a new downtrend,â as âinstitutions and large professional investors are disposing of their long inventory and initiating short positions.â In the BTC scenario, this occurred between the halving in May and mid-June.
âPhase Câ is a âtest of the remaining demand. It is also a bull trap â it appears to signal the resumption of the uptrend but, in reality, is intended to âwrong-footâ uninformed break-out traders.â Such a bull trap for Bitcoin could be the latest attempt to break the $10k mark a few weeks ago.
Is $6K In BTCâs Future?
According to The Moon, the primary cryptocurrency is currently situated in âphase D,â during which the price âtravels to or through a trading range (TR) support.â The Wyckoff distribution pattern asserts that if the asset breaks the previous lows, it could head south rather rapidly in âphase E.â
BTCUSD 4h + Wyckoff Distribution Pattern. Source: TradingView
For Bitcoin, this crucial level is $8,500. Itâs the low from mid-May when it flirted several times with that support but ultimately remained on top. The Moon warned that if the primary cryptocurrency breaks it, BTC could lose over 30% of its value in the upcoming weeks and find itself at $6,000. If the level holds, however, Bitcoin could rise again up to $10,000.
Interestingly, another popular cryptocurrency content creator and analyst, Tone Vays, recently said that Bitcoin will trade in this particular range from $6,000 to $10,000 until the end of the year.
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The post Bitcoin Price Could Dive To $6K If It Falls Below $8,500 Soon, According To The Wyckoff Pattern appeared first on CryptoPotato.
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