The Wolf Den #102 - The Rich Keep Getting Richer
Bitcoin Thoughts And Analysis
First, I want to start with an interesting thread by my friend Filb Filb, comparing USDT money printing and BTC price action. There's no reason to summarize - just read the thread, which makes the case for bullish price action coming soon.
Bitcoin is finally moving, but nothing has changed for me as far as trades that I am looking for. You can revisit any of the past few analyses that I have posted to see what I am watching.
This is still the chart that I am keeping an eye on. As you can see, I added another local resistance that price has just broken through. That made for a more convincing triangle than the larger one, so worth watching. I could see taking a long on the break of that, but I did not. The story right now, predictably, is the 50 MA on the daily. This is the first time since it's broke down in early September that it is being retested as resistance. That is unlikely to be easy to break, and we can see that it's been rejected so far, even with the wick above.
How many times have you heard me mention $10,540? Look at the price action around that line on the daily chart. Tons of candles closing above and below, and only two massive candles that actually broke through. Anything above it to me remains bullish. A break of that top blue zone is really what I want.
As encouraging as this move is today, I am still not ready to trade it. I will keep watching.
Altcoin Charts
If you watched my chart request live stream yesterday, then you likely noticed that I became increasingly more convinced that alts were about to bounce, at least for some relief. As I went through each chart, I noticed that almost every coin was oversold on RSI, and many had bullish divergences. Well, that has played out across the board. Bitcoin Dominance has not budged this morning, Bitcoin price has risen, and alts have risen against Bitcoin. This is a rare combination to be enjoyed, if only briefly.
That said, most alts bounced but are still below key levels of resistance. The trades I am watching all require the coins to break resistance. Here are a quick few, but I am sure you can find similar setups all over the place. ALTS ARE STILL VERY RISKY RIGHT NOW, so smaller than normal positions. These simply look like relief bounces until they break resistance.
CRV/BTC
I was hesitant to post this, because the tokenomics are inflationary and there are generally bad vibes about this coin. DYOR and make sure you really want to trade it.
That said, look at the volume so far in October. Huge spike, especially in the past few days... with price dropping very little. Now we are seeing massive buying volume, with the most recent grey candle being large. This STILL has not triggered from my previous setup, because it never broke the descending black line. If that happens, I expect this to do well.
We also have some local bull divs, which I did not draw.
LINK/BTC
Approaching descending resistance. I am looking for an entry on a clear break and would add on a retest. It's only a break if the candle closes above the line! You can see that it is currently moving through local horizontal resistance at 84550. We want to see this candle close above.
I would place my stop slightly below the most recent lows, in the 78000s or so. First target that I am concerned with is the red line. Reassess if we get there.
This has to BREAK THE RED LINE to be worth considering.
UNI/BTC
Price is currently attempting to break the blue descending wedge resistance on the 4 hour chart. Watch for a close above. I will be looking for that close above and a retest of that line as support, if I can get it. I bought a little earlier already, because of the bull div.
Fib levels and black lines are my targets. Use them as you see fit.
YFII/BTC
"Y" coins have taken a massive hit and have been slower to respond. That interests me, honestly. We can see multiple bullish divergences with oversold RSI and an attempt to break resistance. I would love to catch a retest of the 13467 area as support, that's a clear local resistance that was broken. Best entry is a close above the descending black line, and then potentially a retest as support.
This could have just been a relief bounce, so be careful.
Legacy Markets
It's election season and there's uncertainty in the market. That said, we have been finding some good opportunities for profit, one of which was my recent WKHS trade.
WKHS (WORKHORSE GROUP INC.)
Here was the original setup, which you can see nearly reached it's target and continues to look bullish. We have another entry on that one here from AltcoinPsycho.
I've gone long on $WKHS. There's three things I really love here: 1) Strong fundamentals. Right now, electric vehicles are one of the hottest sectors 2) A textbook perfect support / resistance flip over the green zone 3) Price coiling and presenting a bull pennant. I'm targeting $30 here.
Other trade updates: Still sitting in SPWR and APT. I hope everyone is enjoying the SPWR profits
Don't forget to take some profits on the way up!
How George Soros Broke The Bank Of England
By Sahil Bloom:
In September 1992, a Hungarian-born investor single-handedly broke the Bank of England and collapsed the British pound. He made over $1 billion in the process. Who's up for a story?
By 1992, George Soros had made a name for himself in the world of finance. Born in 1930, the investor had survived Nazi-occupied Hungary before attending the London School of Economics. He launched Soros Fund Management and its primary hedge fund, Quantum Fund, in 1970.
While Soros was building his empire, the makings of his 1992 windfall were taking shape. In 1979, certain European nations linked their currencies together at a fixed rate. The Exchange Rate Mechanism ("ERM") was born. A band of rates that each currency had to remain within.
Its goal was to insulate the countries from currency rate fluctuations that harmed cross-border trade. National banks were tasked with keeping their country's currency within this band. If sellers pushed it down, they had to buy. If buyers pushed it up, they had to sell.
In 1990, despite opposition from Prime Minister Margaret Thatcher, Britain finally joined the ERM. Thatcher resigned and John Major, a long-time proponent of the ERM, ascended into the role of Prime Minister. Shortly thereafter, Britain entered a recession.
The Bank of England wanted to cut interest rates, but it couldn't. This would have devalued the British pound and forced an exit from the ERM. The Bank of England was forced to continuously go into the open market and purchase British pounds to keep it floated.
In 1992, alerted by his protégé Stanley Druckenmiller, George Soros spied opportunity. The entire world knew that the British pound was in trouble. Everyone was waiting for a devaluation, but there was no catalyst. So Soros decided he would BE that catalyst.
He started shorting British pounds. Selling British pounds he borrowed from banks and using the proceeds to buy German marks. If all went well, he could buy back British pounds cheaper to return what he borrowed.
He started with a modest $1.5 billion short, but rates didn't budge. On September 16, 1992, the German Bundesbank president announced he didn't rule out some currencies coming under pressure. Soros took this as a sign. He built his short position to a massive $10 billion.
With a flood of selling hitting the market, the British pound came under tremendous pressure. The Bank of England was sent into complete chaos. It would have to buy in the open market if it wanted to prevent a currency collapse. It was a disaster scenario.
On September 17, 1992, the Bank of England purchased 27 billion on the open market. But the flood of selling was too much. At 7pm, Britain announced it would leave the ERM, allowing the devaluation of the British pound. The date would forever be known as Black Wednesday.
Within days, the pound had fallen 15% against the German mark and 25% against the US Dollar. George Soros closed his short positions against the pound, making an estimated $1 billion profit on the trade. He had broken the Bank of England and collapsed the British pound.
While many viewed the incident as a permanent black mark on the UK as a center of financial prestige, the legacy of the incident is contested. After leaving the ERM, Britain entered a period of growth and prosperity, prompting some to refer to the day as White Wednesday.
Square Buys 50M In Bitcoin
Square just bought 50M in BTC, following in the footsteps of Microstrategy and other companies that are starting to see it as a hedge against inflation and monetary policy. Not a huge surprise, since Square (and Twitter) CEO Jack Dorsey has been a long time proponent of cryptocurrency. His Twitter account description is one word - Bitcoin. This is huge news. It's all happening.
Ripple Threatens To Leave The U.S.
Ripple co-founder Chris Larsen warned the U.S. risks ceding crypto innovation to China.
An ongoing chess match between Ripple, the largest U.S. cryptocurrency firm, and U.S. regulators, has now escalated to Ripple threatening to leave the country. Chris Larsen, a Ripple executive chairman cited increased frustrations over a lack of regulatory clarity from the SEC regarding their native token XRP's security status. Throughout 2017 and 2018, Ripple aimed to work directly with the major U.S. banks as a token to facilitate bank transfers, escrow, and Nostro Vostro. A lack of U.S. clarity has changed the focus of Ripple. They now target middle-tier and lower-tier banks in developing countries that welcome their services. Also, Ripple has targeted remittance services and seen success with companies such as Western Union and MoneyGram.
Regardless of your view on the coin, I believe it would be a major blow to see Ripple exit the U.S. Hopefully forcing the regulator's hand will help bring needed clarity for Ripple and other innovators in need of answers.
Riot Blockchain Gears Up With 2,500 New Mining Rigs
The publicly traded bitcoin miner aims to quadruple its current hashrate by mid-2021.
Riot Blockchain, a top Bitcoin mining company, spent 6.1 million dollars on Bitcoin mining rigs, which will quadruple its hash power. Crypto sentiment may be down for the interim as the market chops and alts drop, but smart players are taking this time to revisit their strategy and place their bets accordingly.
Bitcoin ATM Thieves Prove That We Are Still Early
Canadian police are investigating a failed break-and-enter attempt to steal a Bitcoin ATM
A failed attempt to steal Bitcoin from an ATM might be the evidence we need that the public is still far behind in understanding what cryptocurrency really is. In Canada, two men just attempted to steal a Bitcoin ATM, failing to realize that Bitcoin is digital and that regular ATMs hold much more cash. This same story occurred in January this year, when two thieves broke into a Bitcoin ATM when there was a cash ATM right next to them. Their heist resulted in $0 stolen. We will continue to track this failing trend as an indicator of where we are in terms of mainstream adoption :).
The Wolf Of All Streets Podcast Ft. Mati Greenspan
As a child, Mati Greenspan would report to his grandfather each morning on the price of commodities. It was at this young age that he developed his passion for market. Mati later became one of eToro’s most popular traders. Looking to unlock his full potential, Mati decided to leave his job and found his own company. Quantum Economics is now a highly respected company offering a number of high-end services.
Mati and I further discuss the good QE, Elon heading to Mars, COVID’s lasting impact, a self-made billionaire grandfather, Mati as the face of eToro, managing other people’s money, receiving $30 in Bitcoin as a gift, Link Frogs attacking, leverage, most traders failing, meditation and prayer and more.
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Chart Requests
As I mentioned I would on Tuesday, I live streamed myself doing the chart requests and intend to do this every single week at 2 PM EST on Wednesday. This is a much better way for me to show you exactly how I am looking at and analyzing a chart. They are in alphabetical order, so feel free to scroll through and find your request! I hope you like the new format, because I had an awesome time doing it. Make sure to subscribe to my youtube channel so you don't miss these in the future.
I am publishing the charts below, for reference... just in case you make them your own and follow along.
ALGO/BTC
COTI/BTC
FLM/BTC
KMD/BTC
LINK/USD
PDD (PINDUODUO)
VET/BTC
XVG/BTC
XVS/BTC
YFI/BTC
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Follow me on Twitter at @scottmelker. This is where I am constantly updating my trades and sharing ideas.
On-chain and fundamental analysis, research, predictions and indicators, all in one place. Highly recommend.
The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor.