A current price chart of the total cryptocurrency market cap minus Bitcoin and Ethereum is showing signs that the accumulation phase is about to end. Could the opportunity to buy cheap alts nearly be over?
Altcoin Chart Shows Possible Aggressive Accumulation
Bitcoin found its footing in 2023 fundamentally after brutal bear market thanks to institutional demand and the spot BTC ETF narrative. Select assets like Solana have also stood out as top performing crypto assets during continued suppressed prices across the board.
Soon, however, the rest of the crypto market could participate in the rally, according to the TOTAL3 chart on TradingView and its resemblance with a “Wyckoff accumulation schematic”.
The schematic, pictured below, depicts the bottoming phase of a market cycle according to the Wyckoff Method. After this recurring bottoming pattern ends — referred to as an accumulation phase — the market moves on to the “mark up” phase where prices soar higher.
Is the classic Wyckoff accumulation in action? | TOTAL on TradingView.com
The Wyckoff Method And What Comes Next
The Wyckoff Method and its various phases were discovered by Richard Wyckoff in the early 1900s. Despite its use in financial markets nearly 100 years earlier, the patterns and phases regularly appear in assets like cryptocurrencies.
Wyckoff believed that the market was at the mercy of “The Composite Man” which refers to a group of large players capable of controlling the market. These major players work to suppress prices at lows in order to keep buying assets at the cheapest prices possible.
Once sufficient positions are taken, these large players are ready to drive up prices during what is called the mark up phase. Altcoins so closely match the Wyckoff accumulation schematic, the mark up phase could begin at any moment. If the schematic is accurate, there might not be much more time to buy altcoins for so cheap.
If you do miss your opportunity, don’t worry too much. The Wyckoff Method also suggests that after mark up comes “distribution” and then “mark down.” Distribution is the opposite of accumulation, where large entities keep prices above resistance to distribute at the highest price possible. Mark down is the downtrend that follows once demand is exhausted. When this is all over, accumulation begins again.
This chart originally appeared in issue #33 of CoinChartist VIP. Read the rest of the issue here.
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Tony “The Bull” Severino
Tony “The Bull” Severino, a technical analyst and Head of Research at Bitcoinist. As the founder of CoinChartist.io, an educational platform for crypto traders focused on technical analysis, Tony provides his expertise to help others understand and apply this methodology. He has partnered with industry leaders like Elliott Wave International and TradingView. Through his partnerships, educational resources, and leadership roles, Tony has established himself as an authority on leveraging technical analysis to trade cryptocurrencies.
