Wyckoff Method

The Four Market Phases

1. Accumulation Phase: Institutional operators quietly absorb available supply across a defined horizontal range while retail sentiment is depressed and fearful.
2. Markup Phase: With available supply cleared from order books, aggressive demand drives prices upward into a sustained bullish breakout trend.
3. Distribution Phase: Institutions quietly sell their inventory to enthusiastic retail breakout buyers near market cycle tops.
4. Markdown Phase: With institutional support removed, excess selling pressure collapses prices downward into a prolonged bear phase.

Key Anatomy of the Accumulation Schematic

1. Preliminary Support (PS): The first sign of heavy institutional buying that slows a severe downtrend.
2. Selling Climax (SC): Panic selling by retail traders absorbed by institutional limit orders, setting the bottom of the range.
3. The Spring: A sharp downward test that briefly breaks below support to sweep remaining retail stop losses before closing firmly back inside the trading range.
4. Sign of Strength (SOS): An explosive move on high volume confirming that smart money has gained total control over the asset supply.

How Crypto Traders Use Wyckoff

By recognizing where the market stands within institutional accumulation or distribution schematics, traders avoid buying cycle tops during retail distribution and position themselves alongside smart money during quiet accumulation ranges.

Master market structure and trading frameworks in our Complete Beginner Guide to Crypto Trading.