We now know that Bitcoin’s price is constantly changing. When we look back at the past we see that there have always been upswings and crises. We see, however, that this has never happened by chance, but always in recurring phases!

Every market moves in cycles. This means that the price not only rises, but can also fall. There are different approaches to classify the phases, but a more common one is Wyckoff’s methodology. Although there are different methodologies, the idea behind them is always the same.

Wyckoff’s methodology

Wyckoff Analysis – 2018 Bitcoin by g.grunewald

1. Accumulation Phase

When the market has reached a low point, value investors, insiders and traders start to buy. But the market sentiment is still clouded. The news reports that this was the end and all hope is lost. The last desperate investors sell their positions at a loss and believe it is over.

In this phase, so-called “smart money” starts flowing back into the market and market sentiment becomes neutral towards the end.

2. Mark-Up Phase

In this phase, the market is stable at first but then starts to rise slightly. the first groups are recognizing a possible trend, but most investors are still too jumpy to invest. although now would be a good time to buy, most are just observing in this phase.

The media is usually rather quiet at the beginning of this phase. In the course of time, more and more people start to buy and the price starts to rise more strongly.

At the end of the phase, a so-called bull run begins (more about this in the next lesson). Now the media start to cover events and the people are euphoric. At the end of the phase suddenly everybody wants to invest and is afraid to miss the trend. You notice that when your friends ask you if you can help them since they know you are already an investor. Pro Tip: I know from experience that this is the moment when you should be prepared to think about selling. Be especially careful in this phase. Start selling a portion of your investment and/or set some stop-loss orders.

Watch a video to understand the stop-loss order:

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