The recent spike in Bitcoin (BTC) price after falling below $ 30,000 this Tuesday has sparked the optimistic outlook of the classic financial model for the cryptocurrency.

Developed in 1888 by Richard D. Wyckoff, the model called the Wyckoff Method seeks to control financial market trends based on the relationship between the supply and demand of assets. This method has two schemes: accumulation and distribution.

In an accumulation setup, an asset signals a bottom after a steep fall in price. In the end, this caused the price to rise again. Meanwhile, the distribution setup shows that the asset will be hit after the fixed price increases. After that, the price reverses downwards.

Each setup has five unique phases. During delivery, assets go through the following events in the named phases (in the order in which they are): Pre-Delivery (PSY), Peak Buy (BC), Automated Response (AR), Secondary Inspection, Sign of Weakness (SOW), Final Delivery Score (LPSY) and Post-Delivery Confidence Score (UTAD).

In the accumulation scheme, however, an asset records the following events through its 5 phases (in order): Preliminary Support (PS), Peak Sales (SC), Auto-Raise Rank (AR), Secondary Test (ST), Last Support Score ( LPS) and strength assessment.

Wyckoff confirms Bitcoin accumulation

Comparing Bitcoin’s recent price action and the events depicted on the Wyckoff accumulation chart, it appears that the cryptocurrency is grappling with a Phase C end support point.

Phase A in the graph above shows the exhaustion of the previous decline in the Secondary Test (between $ 28.8,000 and $ 30,000) and the Peak Sell (around $ 34,000). So far, the Wyckoff method has dominated.

During Phase B, an automated rally (AR) was approaching, led by both institutional demand for Bitcoin and short sales. After that, the price for the secondary tests fell continuously and rose again after testing the horizontal peak sales line from phase A.

Now the Bitcoin price has entered phase C and lets the “smart money” decide whether the cryptocurrency is ready to move higher. A bullish confirmation will come as the ongoing rally moves beyond the SC-ST period accompanied by stronger volume.

Phases D and E reflect a full recovery towards $ 60,000.

“That seems like a possibility,” said market analyst Kevin Swenson. “We just hit a low of 28.8k … If this pattern works, we should be entering the final phase of recovery now.”

In terms of the Wyckoff Method, this $ 28.8,000 low is very similar to the $ 65,000 high. Both produce maximum emotional effects on the market participants. “

Meanwhile, Bloomberg Intelligence’s chief commodities strategist, Mike McGlone, without referring to the Wyckoff method, noted that repeated bullish rejections near $ 30,000 are similar to Bitcoin’s $ 4,000 rise in 2019-2020.

“Selling Bitcoin with good support and a similar drop below most means that around $ 30,000 this year didn’t end well,” he added, “and if the key question this time is whether or not it makes a difference, we will see a longer lasting bull market. “