What Is the Wyckoff Method? Market Structure Analysis for Crypto Traders

1. What Is Wyckoff?

Developed by Richard D. Wyckoff in the early 20th century, the Wyckoff Method uses supply and demand, price action, and volume to predict market trends in financial and crypto markets 

2. History & Author

Wyckoff (b. 1873), a pioneer trader and author, published The Richard D. Wyckoff Method of Trading and Investing in Stocks in 1931, laying foundation for behavior-based market analysis 

3. Core Principles

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• Supply & Demand: Price moves according to buying vs selling pressure .

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• Cause & Effect: Accumulation or distribution phases lead to upward or downward moves 

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• Effort vs Result: Comparing volume to price changes to detect trend strength or reversal 

4. Wyckoff’s Four Market Phases

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• Accumulation: Consolidation after decline; smart money quietly building positions .

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• Markup: Breakout from accumulation with rising price and volume 

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• Distribution: Sideways price action near highs; large players begin selling .

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• Markdown: Breakout downward with strong sell volume; price declines sharply .

5. 4-Step Wyckoff Trading Approach

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• Step 1: Determine market trend and behavior using charts.

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• Step 2: Identify current phase (accumulation, markup, etc.).

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• Step 3: Recognize entry/exit signals: “spring”, “test” in accumulation; “upthrust” in distribution 

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• Step 4: Use volume confirmation to validate continuation or reversal