STA Blog

Thursday 23rd March 2022 Alessio gave an excellent webinar for the International Federation of Technical Analysts (IFTA) entitled ‘Crypto Markets and the Wyckoff Method: A Top-Down Approach’. He’s a teaching instructor @WyckoffAnalysis whose website is www.wyckoffanalytics.com. Not being exactly au-fait with the method, a quick online search tells me that it’s based on supply and demand and was first developed by Richard D. Wyckoff, a 15 year-old stock runner in 1888. Indices of the many text books I have at home left me none the wiser.

Introduced by Bruce Fraser of IFTA – who’s looking for suggestions as to further presentations (contact webinars@ifta.org) – Alessio’s English is excellent (with a heavy Italian accent) and explains that he looks ‘’to ride the uptrend for a minimum of 2-3 months’’ keeping an eye on risk-on opportunities and early leadership within the overall market. Unsurprisingly, sector rotation strategies are his main focus.

Clear charts of a large array of crypto-related companies follow. He uses both point-and-figure (1×3 box and 3% box) and bar/candlesticks, often with a log scale as some of these instruments tend to have massive moves. Key is a simple 9-week moving average, sometimes combined with a 9 and 21-day pair, where he’s looking for a ‘’change of character’’, a switch between trending and a consolidation phase in the market. These he labels 1 to 5, nothing to do with Elliott Wave and not necessarily following on immediately from each other. He reminds that because the ‘’crypto market is very fast’’, something up to a 10 X move he calls them, one must adjust the moving averages. He also believes that low volatility is a sign of a mature market.

Towards the end of his talk, he shows us a crypto heat map for Q1 2022 with recent outperformers Fexix and Kyber Network. What astounds me is just how very many firms in this sector are listed, and what an extraordinary number of tiddlers there are. Perhaps because of this, and being a high risk asset class, currently 80% of his crypto account is in cash. He signs off promptly on the hour after a really slick and interesting presentation.