But why are they selling? What's happening with the market? Wasn't everything going well with so many good news? I just invested more money in altcoins and leveraged, and it turns out that now the price is dropping; I just lost a lot of money... wait... the price is recovering; I will reinvest and recover some of the losses... oh no, it kept dropping and now I've lost more...
It took me a long time to learn about this, and sometimes even when I'm aware of the process, I feel insecure about whether it's going to happen or when it's going to happen, but nonetheless, history repeats itself every so often; in fact, the mantra: "History repeats itself" is key in trading; many look for whether the market behaved similarly in the past to foresee future movements.
What helped me the most is Wyckoff's theory, which is a way of understanding market behavior by considering Smart Money or Strong Hands.
Market Cycle according to Wyckoff
Accumulation:
Strong hands buy silently while the price moves in range.Objective: Accumulate before a rise.
Keys: High volume at the bottom, "spring" or false bearish breakout.Markup (Bullish trend):
The price breaks the range and begins a bullish trend.
a) You see higher highs and higher lows.b) Demand exceeds supply.
Distribution:
Strong hands sell to retailers during a new range.Objective: Sell without crashing the price suddenly (Although in the crypto world, the price can drop suddenly, what took weeks to rise can evaporate in just one hour).
Keys: High volume at the top, "upthrust" or false bullish breakout.
Markdown (Bearish trend):
The price drops after distributiona) You see lower highs and lower lows
b) Supply dominates
Practical Utility:
👉 Take total or partial profits when the price reaches highs.
👉 If you are going to continue trading, do it in cash, eliminate any loans if you leverage with them in the Spot market.
👉 In case you continue trading, it is recommended to do so with less capital.
👉 Do not get carried away by euphoria and greed; if the price has reached highs, it is not the moment to sell your house and leverage to the maximum for more returns, but rather a time to take profits and protect your capital; the money you have exposed to the market is at risk of potential devaluation.
#wyckoff #TradingCommunity
