DYDX Final Stages of Accumulation. 17X PotentialTLDR:
• DYDX Adheres to an almost perfect Wyckoff accumulation schematic.
• I think it’s a good idea to hang on to the coattails of such a Market Maker.
• I estimate that DYDX can reach the 1.618 extension, 37$ at the final phase of the bull market.
Preface:
• Before we proceed, you must understand that in reality assets don’t follow a picture-perfect accumulation schematic. If you read books such as the “Three Skills of Top Trading” and you wish to apply that knowledge, you have to use discernment. If trading was as easy as technically applying an accumulation schematic to a chart, we would all be millionaires.
• Having said that, DYDX follows a fairly easy accumulation schematic, and I am reasonably certain it is a possible 17X if you choose to buy and hold until the final stages of the bull market. The DYDX MMs know their business!
Phase A, setting the Range, May 2022 – September 2022:
• Selling Climax: In June 2022 DYDXs’ markdown phase was over. DYDX made its range low at the 1$ level.
• Automatic Rally: After the panic selling was over, DYDX immediately recovered and set the range-high at 2.7$.
• Secondary Test: After the recovery, DYDX retested the range-low at 1.107$.
Phase B, Consolidation, September 2022 – February 2023:
• Phase B is the consolidation period. During the consolidation phase, the MM tests the extremes of the range to gauge the levels of supply and demand for the asset. This phase includes bull and bear traps to shake out the weak hands and take over the supply as much as possible.
Phase C, final shakeout, February 2023 until the present.
Phase C begins after the Market Maker already took over the lion’s share of the supply and the asset is ready to move away from the range. This phase includes:
• The Spring: In this phase, price will perform a sharp move lower, possibly making a lower low. The purpose of the spring is to cause uninformed traders to believe that the market is bearish and sell. Then, the MM moves prices sharply away from the lows.
• It is a common conception that this phase has to include a lower low. However, it doesn’t have to be. You should look for a spring failure pattern and a move up towards the range high.
• Sign of Strength: Price moves higher with increasing volume to test the range high and possibly beyond.
Phase D, Breakout, and retest of the range high as support:
• Phase D is yet to come. If I will see that you people are interested, I will update you. Feel free to press boost
Price Potential:
• I think that in a bull market DYDX can make it to the 1.618 Fibonacci extension easily, hence the 37$ target. Of course, this is long term.
NFA.
What do you think? Please share in the comments.
Best wishes.
