Crypto glossary
Wyckoff method
The Wyckoff method is a framework for reading trading ranges as accumulation or distribution by large players, using price, volume and set phases.
Richard Wyckoff, an early 20th-century stock market analyst, argued that large operators, which he called the composite man, accumulate positions quietly in ranges before a markup and distribute them before a markdown. His followers turned this into schematics with named events: a selling climax, an automatic rally, secondary tests, a spring that briefly breaks the range low, and a sign of strength as price leaves the range. Distribution has a mirror sequence with an upthrust after distribution.
Wyckoff schematics are a staple of crypto analysis. Analysts regularly overlay accumulation diagrams on bitcoin's ranges after bear markets, and the spring, a quick drop below support that traps sellers, is closely related to what traders now call a liquidity grab.
The schematics are idealised and markets rarely follow them precisely. The same range can be labelled accumulation or distribution until the breakout reveals which it was, and fitting phases after the fact is easy. Wyckoff's broader principles of supply, demand and volume confirmation are more robust than any single diagram.
Example
After a crash, BTC ranges for three months. An analyst marks a selling climax at the low, a spring when price briefly breaks below it on low volume, and a sign of strength when it rallies through the range high.