VAIFOFF: A METHOD THAT HAS BEEN TESTED FOR CENTURIES AND THE CRYPTO MARKET

Traders and investors often look for a magic wand to help predict market movements. Richard Wyckoff proposed not a wand, but an entire philosophy of market reading based on understanding how large participants operate. His approach is not just a set of rules but a perspective on cycles and phases that repeat over and over.

Wyckoff lived in the early 20th century, but his methodology remains relevant even today, in the volatile crypto market. Why? Because the essence hasn’t changed: large capital always enters when fear is at its maximum, and exits when euphoria peaks.

THE THREE LAWS THAT EVERYTHING RELIES ON

Before discussing schemes and phases, it’s essential to understand the foundation. Wyckoff identified three fundamental market laws.

Supply and demand – the main regulator

This is not theory; it’s the mechanics of any market:

• Demand exceeds supply → price rises
• Supply exceeds demand → price falls
• Balance of demand and supply → price moves sideways, low volatility

This triad works everywhere: on stock markets, in cryptocurrencies, on commodity exchanges. Without it, there is no movement.

Cause creates effect

Every price movement is a result. Behind each upward or downward trend is a cause. In Wyckoff’s method, the key to understanding is the consolidation phases (sideways movements). It’s precisely there, in the calm of the range, that large players prepare their next move.

When retail investors lose hope and sell at a loss, large capital quietly accumulates positions. Then, when sentiment shifts, the same retail traders buy at the top, and the big player exits. This is not a coincidence – it’s a pattern that repeats.

Effort must confirm the result

If the price moves easily but volumes are weak – it’s suspicious. It’s likely manipulation before a reversal. A strong move without volumes is a red flag. Conversely, a powerful trend occurs with increasing volumes, confirming the sincerity of the movement.

THE FIVE PHASES OF THE PRICE CYCLE

The entire market cycle can be broken down into five stages. Each stage has its logic and opportunities.

Accumulation (Accumulation) – the phase when large capital begins to enter after the price has fallen. On the chart, it looks like sideways movement, when no one believes in growth, but “smart money” is already buying. This phase can last months.

Uptrend (Uptrend) – retail traders notice the price creeping upward and start buying more actively. This amplifies the movement, pushing the price higher.

Distribution (Distribution) – at the top, the big player starts quietly selling their positions. On the chart, it’s again sideways movement but at high levels. Retail investors buy the “tops,” thinking the rally will continue.

Downtrend (Downtrend) – when large capital has fully exited, the decline begins. Usually, the fall is faster than the rise because panic works more powerfully than optimism.

Consolidation (Consolidation) – the price finds balance, a sideways range before a new cycle.

TRADING RANGES: THE BIG MONEY’S LABORATORY

Sideways movements (trading ranges) are not boring pauses; they are where the next big move is being prepared. Wyckoff believed that reading these ranges is essential.

Each range consists of specific elements, each with its name:

PS (Preliminary Support/Supply) – the first attempt to halt the trend. At this level, failure often occurs, and the level is broken.

SC/BC (Selling/Buying Climax) – the peak of climax. On high volumes, the last sellers surrender (in accumulation) or the last buyers enter (in distribution). It’s the moment of maximum anxiety.

AR (Automatic Rally/Reaction) – a rebound after the climax. This rebound often shows where the boundaries of the range are.

ST (Secondary Test) – retesting the SC/BC level, confirming that the first wave was not a mistake.

Spring/UTAD – the final manipulation before a breakout. The big player either pushes the price below the lower boundary (Spring in accumulation) or above the upper boundary (UTAD in distribution) to squeeze out the last liquidity before the real move.

SOS/SOW (Sign of Strength/Sign of Weakness) – the price breaks out of the range with confirmation. This signals that a new movement is beginning.

ACCUMULATION IN MORE DETAIL

Accumulation is the entry point. Here, large capital starts building a position after a decline. A trader should learn to recognize signs such as:

• Price has fallen, but volumes on the decline are increasing – this could be a bottom
• A range is forming with specific levels (top and bottom of the range)
• Periodic touches of the lower boundary (this is Spring) – the big player tests if there are still sellers below
• Volumes decrease as the range develops – interest wanes
• When the Spring is no longer needed, the price breaks above the upper boundary with increasing volumes – this is SOS (Sign of Strength)

After SOS, an upward trend begins.

DISTRIBUTION: A MIRROR IMAGE

Distribution is the opposite of accumulation. Large capital exits, and retail traders buy.

• The price has been rising for a long time, sentiment is extremely bullish
• A range forms at the top – the big player is selling
• Periodic breakouts above the upper boundary (UTAD) occur – the big player tests if there are still buyers above
• Volumes increase as the range develops – a sign of structural weakness
• When UTAD no longer works, the price falls below the lower boundary with volumes – this is SOW (Sign of Weakness)

After SOW, a bearish trend begins.

VOLUMES: THE LANGUAGE OF BIG MONEY

Volumes are not just numbers. They are the signature of the big player. If the price rises on low volumes, it’s hard to believe. If the price falls on low volumes, it looks like manipulation before a buy.

The simple rule: a strong move must be confirmed by volume. If not, the move is suspicious and may reverse.

WYCKOFF IN THE CRYPTO MARKET: DOES IT WORK?

The crypto market is young and volatile, but this is its advantage for Wyckoff’s methodology. High volatility means clear phases and bright patterns.

Yes, the crypto market is constantly changing. More institutional capital is entering, making the market more predictable. Regulatory actions also influence dynamics. Overall capitalization is growing, and the structure is improving.

But there is an important condition: the higher the liquidity of an asset, the better Wyckoff works. Low-cap coins are hard to analyze because of many manipulations and little real structure.

BTC (Bitcoin) and other top assets are ideal for applying the method.

PRACTICAL RULES FOR TRADERS

1. Never trade against the main trend. If you’ve identified accumulation, do not sell. If distribution is visible, do not buy aggressively.

2. Determine the current phase before any trade. What part of the cycle is the asset in? Accumulation, uptrend, distribution, decline, or consolidation?

3. Use volumes as confirmation. Movement without volumes is doubtful.

4. Choose assets with clear cycles and good liquidity.

5. The risk-to-reward ratio should be at least 1 to 3. This means risking $1 to potentially earn $3.

6. Enter conservatively after the price exits the range when the structure is already confirmed.

SUMMARY

Wyckoff’s method is over a hundred years old, but it works. Markets remain the same: large capital enters during fear, exits during euphoria. Retail traders do the opposite.

Wyckoff provides a tool to understand this game and align with large capital. It requires practice, patience, and the ability to read structure. But the results are worth the effort.

Current data: BTC is trading at $86.74K with a -3.20% change over 24 hours. Volatility in crypto remains high, creating clear patterns for applying Wyckoff’s methodology.