The Wolf Den #115 - The Wolf Den Goes Daily!
Bitcoin Thoughts And Analysis
Bitcoin continues to feast on bear meat, consuming every dip and forging ahead into the stratosphere. As I have discussed many times, corrections and retracements are not a matter of if, but when, but it's nearly impossible with this price action to predict when that will happen. When it does, I would think that a 30% drop or so would be somewhat natural based on past bull market runs. That would be healthy, not scary.
We are still seeing bear divs forming, particularly on the daily, so that retrace could come sooner than later, but I am not trading on that.
WEEKLY CHART
The weekly candle closed slightly below resistance yesterday, but price is already attempting a push through on the first day of the new candle. We will ultimately have to wait 6 more days to see how this closes, but this is the last level of macro resistance on any time frame weekly or above before the all time high. The monthly is already above its final levels (not shown today, I have shared that chart 100 times). Remember, the last few weeks were the final confirmation of a bull trend, with a higher high above $13,868 confirming March's higher low.
We JUST REALLY TURNED BULLISH. Don't be a jackass here, dips are for buying. We spent years in a tough market, now is the time to sit back and enjoy the gains.
DAILY CHART
Just pointing out the confirmed bear div and the potential further divergence that is forming. RSI is also still overbought here.
4 HOUR CHART
I drew some fresh local levels for those who are scalping, at the top right corner of the chart. I now view the blue zone as the key local support.
I zoomed this out really far to show you the 50 MA on the 4 hour. The red arrows are areas that it has acted as support since flipping it from resistance and since price broke from the triangle. Buying the 50 MA has been a profitable strategy for a long time here, so I would not question it if it happens again. It will eventually break, it always does, but it's been strong support.
Altcoin Charts
I remain cautious with alt coins here, as nothing has really changed in terms of Bitcoin Dominance and a major Bitcoin move in either direction is not likely to help alts.
That said, it is notable that today we are seeing majors like XRP and LTC making significant moves against BTC while BTC rises. That is rare and worth watching.
More important to note that these setup are largely all AT RESISTANCE! We do not buy resistance, we wait until it is flipped to support. So realize that these are very likely to never trigger - they are setups, not signals.
HOT/USDT
HOT is a low sat that was wildly profitable to trade at various time over the past few years, including a recent trade that I shared here in June when price broke the descending blue line. This was based on the weekly chart, and was quite profitable for those who chose to ride along.
I set an alarm on the descending black line, which went off this morning on a strong bullish candle breakout. As you can see, price is currently at a key resistance level, 5001. I want to see a clear candle close above that level and then hopefully a retest as support. More volume would also be encouraging.
That said, I view this as a breakout of the local descending pattern, so I expect this to continue up. Key levels are shown as pink lines. My stops are below the most recent wick down, lower than the 4000 level. Lots of room to breathe, smaller position.
LTC/BTC
Litecoin is making a significant move against BTC. You can see in the box that volume has been generally rising over the past few weeks. with a huge candle a few days ago and an even bigger volume candle likely today. Once again, this was preceded by significant bullish divergence with RSI (shown below), consistently the best signal of a likely bottom or at least bounce.
At this point, if you are not already in, I would be watching for a clean break of the descending blue line. That would signal that this is actually reversing and heading back up.
A break of the blue line should ultimately take price at least back to .0054 or so, the top black line. We can talk about higher targets if by some miracle that actually happens!
VOX
I am trading this on Uniswap, so my position is small because there is no stop loss. I calculate my position size to allow for the trade to literally go to zero. Also, this chart is not available on TradingView, so you get this ugly chart on a second hand charting software!
All of that said, VOX looks good here, breaking descending resistance with strength. Key levels are marked. Theoretically this should return to the top of the descending line based on the breakout. I am playing the ascending line as support. A clear break of that and I will consider exiting earlier than my 0 stop loss!
XRP (USD AND BTC)
The XRP/USD pair has looked good for a while now - I shared a trade on this last week (maybe the week before)? You can see that trade coming to fruition in the chart above.
There are a number of way to approach this from here, honestly, if you still want to get in. Right now is not an ideal time from a technical perspective, so I would personally be looking for a retrace (may not happen) to the support at .2598 that remains untested. You can also use the blue 50 MA for and potential entry on a retrace, and also for a stop loss if you give it some room below. The ascending blue line is ultimately the key support for me, so anything above that and my bias remains bullish. Everything on this chart looks bullish to me for the moment, but we know that can change with a single BTC hiccup.
The BTC pair is looking even more interesting today, with a clear break and retest of the descending blue resistance and a potential move above the trading range. A clear close above that range should signal that price has bottomed and is ready to move up. That said, deviations are common and you can see that just a few days ago price managed to close above the range and then fell back in. Regardless, from a chart perspective this looks quite bullish. To be clear, we need to see it ABOVE the trading range and not rejected at the top.
I would not want to see price back in the bottom half of the range if it fails to break above.
Here is the above chart with Fibonacci levels as targets.
Citibank Analyst Predicts 318K Bitcoin - By Next Year
This news has been widely reported and with a bit of misdirection. As is often the case, a specific analyst at a company makes a prediction or statement, and the news outlets run with it as if it's the official stance of the company. We have seen this countless times with Goldman Sachs and JP Morgan.
That said, this particular prediction went to Citi's institutional clients and was widely dispersed. As you know, I am not a fan of grand predictions - they are great sound bites but meaningless for our actual trading an investing.
He made a very intelligent statement within the analysis - “price is likely to continue to go up, and a lot.” Based on the macro situation and past bull markets and retraces, I think that this is something that we can all agree on.
Bitcoin Cash Undergoes Succesful Hardfork At a Cost
One of the most important aspects of Bitcoin’s code is its communal nature. The perversion of centralization and the possibility of a hard fork come at a cost to its unrestrained democracy. In simple terms, when the community disagrees, the code splits into two chains. The result is typically one community staying put and another forming with an entirely new cryptocurrency. Token holders benefit in that they receive free tokens during the forking of the blockchain.
Bitcoin Cash isn’t the first Bitcoin hard fork, but it is easily the most popular. It has a tight-knit group of supporters led by Roger Ver. My goal is to help you be profitable and this usually takes a back seat to the philosophies of each cryptocurrency. That being said, the trend of forking until it’s “just right” isn't one we support. Each new iteration of Bitcoin (BCH, BSV, BCHN, and BCH ABC) has underperformed in terms of price and community approval. The best way to think of this is an artist finishing a masterpiece that most people love and then failing to put the brush down, continuously making edits while giving in to minority criticisms. Eventually, the piece of art no longer resembles what it was once intended to be.
It has become clear that Bitcoin is gaining favorability from Wall Street, institutions, and major investors. Simply put, there is no good reason to want to change the nature of Bitcoin. Regardless of whether it is solving its initial intent as a “peer-to-peer” cash system spelled out by Satoshi in the official white paper, Bitcoin has proven that it should not be challenged or fundamentally altered. It is possible that in the next run, one or many of the forks achieve all-time highs and or significant gains but I believe the long-term sustainability is lacking for Bitcoin’s lineage of forks. This thinking extends to the majority of forks within the space that continue to lose sight of the forest through the trees.
Bitcoin Supply Is Dwindling
From the article ...
Why declining Bitcion reserves is bullish.
"A block reward halving occurs every four years until the fixed supply of Bitcoin at 21 million gets reached.
After each block reward halving, the number of Bitcoin miners can mine per day declines by half. This means prior to the May 2020 halving, around 1,800 BTC were mined. Until the next halving in 2024, 900 BTC will be mined per day.
The amount of available Bitcoin on exchanges is significantly reduced since less BTC getting mined per day alongside rising exchange outflows.
If the demand for Bitcoin continues to rise, then the decline in supply would cause the value of BTC to surge. Hence, many investors might be expecting the price of BTC to see a prolonged uptrend in the medium term."
Outflows are down, hash rate is up and there is clear data showing that institutions are accumulating. This has the making of a supply side shocks. When demand vastly outweighs supply, the only way for price is up.
The Largest Bank In Belarus Opens Exchange Services
Another bank is reportedly moving into crypto amid a major bull run in crypto markets.
Adoption is happening all over the world and is being driven my legacy financial systems. National banks and huge institutions are opening exchange services across the globe, this time in Belarus where customers will be able to buy and sell crypto currency through a Visa payment card.
During the last bull run, we saw retail rushing to buy crypto through Coinbase and other crypto specific companies. Not the case this time - the banks want in on the action.
Bullish.
SEC Continues To Seek Clarity
Trade LESS, Make MORE
Update of a previous article:
Trading is one area where less work can often mean more money. The statistics are clear - people who over trade make far less money than those who take better positions with more conviction and are patient. In fact, any trading is likely to lose you money vs. investing.
It’s better to miss a good trade than to take a bad one. Missing a good trade doesn’t deplete your capital - it only fails to add to it. A bad trade will not only reduce the size of your trading account, it will eat up emotional capital and your confidence. A losing trade is not a bad trade, it is one that doesn’t meet your requirements. Bad trades come from working hard to see something that’s not there, guided by your need to trade rather than the market offering a good opportunity. Being a “full time” trader does not mean you have to be trading full time. You take what the market gives and know when to sit on your hands and do nothing.
Statistically, passive investors win the race, like the slow-moving tortoise. Behavioral finance professors Terrance Odean and Brad Barber of the University of California Davis researched 66,400 investors between 1991 and 1997 and concluded that two things weighed down the active traders – lousy stock picking and transaction costs.
In fact, active traders (averaging 258 percent turnover) earned 7 percent less annually than buy-and-hold investors (2 percent turnover), That’s 11.4 percent for the gunslingers vs. 18.5 percent for the sideline-sitters.
In addition, the research showed that another group of investors who converted to online trading saw their returns drop from beating the market by two percent before going online to falling under the market by three percent once online.
Here’s even better proof. Joe Ricketts, Ameritrade’s founder once told Fortune magazine: “The best thing, really, for an investor to do is buy a good company and hold it… Trading often and heavy is not something that makes you a lot of money. That’s contrary to my own interests, but it is the truth.”
Focusing on larger time frame trades that fit every criteria of your system is more likely to make you money than aggressively entering and exiting positions. And to take that a step further - investing is almost ALWAYS better than trading.
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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.