A Rare Wyckoff Spring Has Been Spotted In The Crypto Wilderness

A Rare Wyckoff Spring Has Been Spotted In The Crypto Wilderness
Jonathan Hobbs

about 1 year ago2 mins

Richard Wyckoff created the Wyckoff method in the early 1930s – and it’s still a big hit among traders. If Wyckoff were alive now and investing in crypto, he’d be looking at Chainlink’s LINK token with keen interest.

I wrote more on the Wyckoff method over here, but the gist is this: big-money investors (i.e. whales) repeatedly fleece smaller retail investors by moving the price of an investment for their own benefit. The trick to winning in these seas is to think like those whales and swim in their slipstream.

See, for giant investors to buy into an investment, they need time to build up positions. They can’t just buy everything at once: there wouldn’t be enough sellers to meet that demand. So, they split their orders into smaller chunks and add to their positions in the most stealthy way possible.

That usually results in a long sideways trading range for an investment – like LINK has seen recently (red and green, in the chart). When you look at the weekly closing prices – the token’s last traded price at the end of each week – the bottom of that range was around $6.20 (red dotted line) from July until the start of November. But then the price briefly pierced below that level after the FTX fiasco – and at that point, many investors would have sold, or shorted LINK (and other digital assets) expecting a bigger downside move. That panic gave the whales just enough liquidity to fill their final orders and drive the price back into the range – a classic Wyckoff spring.

This is just a theory, mind you, and it doesn’t guarantee LINK is now destined for much higher prices – the whales might have other plans, after all. If you’re more interested in fundamentals than technicals, here’s a deep dive into how Chainlink works.



All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG