A Model to Explain What Happens in Financial Markets During Artificial Pressure That Disrupts Natural Trend Objectives
Take the Wyckoff model, for instance—known as a pattern of accumulation or distribution depending on its context. Its strength lies in the timing of its occurrence.
Now, consider a scenario like this one: A particular token attempts to align with Bitcoin’s trend, under the assumption that market conditions are ripe for liquidity gathering to drive prices higher. Indeed, it breaks through a significant weekly/monthly resistance (highlighted in yellow). However, unexpectedly, Bitcoin—which dominates liquidity and sentiment—drops, forcing the rest of the market to follow.
Question: Why would a token, after breaking through a strong historical resistance level, suddenly fall back? These levels aren’t typically breached easily, nor should they be lost so easily.
Bitcoin’s Liquidity Dominance
Bitcoin’s control over market liquidity makes it the primary indicator and driver of overall crypto performance. Any token that moves against it risks losing momentum and value, regardless of its technical strength.
The Current Dilemma
Today, Bitcoin has reached all-time highs, yet many altcoins have returned to multi-year lows and failed to reflect Bitcoin’s bullish outcomes. So, what’s the next logical step?
In 2021, some tokens saw over 40x growth within 4 months. What we might witness now is a similar surge, compressed within 3 to 4 weeks—a rapid movement compensating for the time and liquidity lost due to prior manipulations or market suppression.
⚠️ Final Note:
Be prepared to exit your trades at any sign of euphoric rally. Sudden optimism often marks the exit point for smart money.