The Wolf Den #121 - All Eyes On The King
Bitcoin Thoughts And Analysis
Bitcoin remains bullish - there is very little to analyze. Price is a few hundred dollars and a couple percent from breaking it's all time high. Incidentally, that all time high is different on each exchange, so we can all celebrate in our own way if it eventually happens.
It could easily happen today.
The present all time high will ultimately become an irrelevant, forgotten number on a chart.
It's important to us now, but of little significance long term if it is broken and left in the dust.
MONTHLY CHART
When I look at the Bitcoin chart, my inner childhood nerd always comes out and I think of the Lord Of The Rings.
Now that we have only one line of resistance left, it strikes me as such:
"One line to rule them all, one coin to find them, One asset to bring them all, and in the darkness bind them."
The all time high is the only line left on the chart. If broken, we will no longer have any resistance to use for technical analysis. Everyone is going to become an Elliott Wave and Fibonacci extension maximalist looking for targets.
WEEKLY CHART
We are likely about to hear quite a bit of chatter about TD Sequential on the weekly chart, so I want to discuss it now. A green 9 would technically be a bearish indicators, as it's a short and sell signal. That said, let's look at the last 3 green TD9s on the weekly chart. We had around 11K before the all time high at 20K, one at 5K before price moved to 14K just weeks later, and one a 10K in June, which preceded a small retrace and then a rocket to near all time highs.
The moral of the story? It's been an unreliable indicator on the weekly for years, and I am not concerned with it unless I see a confluence of other factors. Look at the daily TD9s below.
DAILY CHART
The amount of green TD Sequential Daily 9s that BTC has disregarded and left in the rear view in the past few months is comical. We had another one a few days ago.
Bottom line - ALL EYES ON THE ALL TIME HIGH. Everything else is irrelevant for today.
Altcoin Charts
All of the charts that I have shared are still relevant - many of the coins have come back down to test support, so it's not as bad as it looks. Not saying you should enter or that they will hold! But former resistance being tested as support is fine. Again, my leveraged positions are almost all closed except LINK, but my other trades that did not hit the targets are intact - stops didn't hit and they still look ok. Most hit targets quickly. HOT finally hit its target after a week - a long time in crypto, but nothing in any other market. I know a lot of you were in this trade.
BITCOIN DOMINANCE
Bitcoin Dominance broke THREE SUPPORT LEVELS in the past few days. That was plenty of time to make money on alts. It has now bounced, so we watch and wait.
LINK/USD
I am only sharing this because I am presently in it and I try to share all of my trades when possible. I has once again retested the descending line as support, which is why I jumped in. My stops are below the ascending line. I really want to see a close above $15.757.
Simple.
I can't recommend joining this or any trade at the moment.
Legacy Markets
XAU (GOLD)
Gold is currently trading like a low liquidity altcoin, dumping hard even while the dollar is dropping itself. Strange times - usually a dollar drop leads to appreciation in the price of precious metals.
That said, gold is approaching some interesting areas. First we have the $1795 level which was never properly retested as support. Below that is a clear demand zone between $1670 and $1729. If price dropped that far, it could form a bull flag - the one that I have drawn is an IDEA and not valid, although the top resistance is the key, regardless what patterns form. If you are looking to enter gold, these could be decent opportunities.
The Story Of John Paul DeJoria
By Sahil Bloom:
One serial entrepreneur grew up in foster care and started his first business while living out of his car. He overcame the odds to build multiple businesses, amassing a net worth of over $3 billion in the process. Who's up for a story?
John Paul DeJoria was born in 1944 in Los Angeles, California. He faced adversity from a young age, as his parents divorced when he was just two years old. Watching his mother struggling to make ends meet, at age 9 he started working odd jobs to help support the family.
Sadly, when his single mother was no longer able to care for them, he and his brother were placed in foster care in East LA. Growing up in this challenging environment, DeJoria struggled to find his purpose. He joined a street gang as a teenager and headed down a bad path.
But when his high school math teacher told him he would never succeed at anything in life, a switch inside the young DeJoria flipped. He was determined to clean up his act. Upon graduating high school, he joined the Navy, where he served for two years.
After leaving the Navy, without money for college, he held a series of jobs, including janitor and encyclopedia salesman. But he found his passion in an unexpected place: the hair care industry. He took sales roles at Redken, Fermodyl, and Trichology, learning all he could.
Fired from all without good reason, he decided to go out on his own. So in 1980, while living in the back of a car, he took out a $700 loan and partnered with hairdresser Paul Mitchell to form John Paul Mitchell Systems. For John Paul DeJoria, it was time to bet on himself.
The focus of the new company was on developing products designed to improve the efficiency of professional stylists. With Paul Mitchell's insider knowledge and DeJoria's salesmanship, John Paul Mitchell Systems was destined to break through. It was just a matter of time.
With no outside funding, they struggled to make business ends meet and pay their suppliers. But as sales ramped up, they found a way to scrape together the money to keep the suppliers happy and get the product out to the salons. By 1983, they had done $1 million in sales.
With an innovative product, unique selling strategy focused on stylists, and a great price point, John Paul Mitchell Systems took off. They rapidly expanded into new markets. By 1986, with 27 employees and a large non-employee salesforce, sales were pushing $100 million!
Sadly, soon after, tragedy struck. Paul Mitchell was diagnosed with pancreatic cancer and passed away in 1989. But his legacy would live on, as DeJoria continued to build the John Paul Mitchell Systems empire.
Around this time, with his hair care juggernaut on auto-pilot, John Paul DeJoria began diversifying into other businesses. He partnered with a friend, Martin Crowley, to make and sell the smoothest tequila in the world. The Patron Spirits Company was officially born.
The product was expensive - much more expensive than most tequila at the time - but they knew the customers would flock to it. After appearing in Clint Eastwood's "In the Line of Fire," sales of the product took off. Patron quickly became a true pop culture sensation.
Today, John Paul Mitchell Hair Systems is a global business with over $1 billion in revenues and Patron Spirits Company is believed to generate over $250 million annually. DeJoria has many other successful businesses, including House of Blues and several energy companies.
John Paul DeJoria has achieved incredible success, made even more impressive by his challenging start in life. Forbes estimates his net worth at ~$3 billion. Importantly, he has used his platform give back, winning Variety Philanthropist of the Year in 2017.
Not bad for a guy who started his first business while living out of the back of his car! I hope you enjoyed this inspiring story as much as I did.
Crypto To Be Used for PayPal Vendor Purchases
Dan Schulman, the CEO of PayPal did an interview yesterday where he officially announced that all of PayPal’s 28 million vendors will accept crypto as a means of payment. Right now, PayPal currently supports Bitcoin, Ethereum, Litecoin,and Bitcoin Cash for purchase. In the interview, he outlined that he personally sees Bitcoin as more of a currency than a store of value, and by increasing its everyday utility, it will ultimately reduce its volatility - a net positive. We personally believe that Bitcoin’s two major competing narratives; store of value and new digital currency, are both overall positive for Bitcoin’s growth. Multiple narrativs keep Bitcoin’s value thesis wide, giving multiple reasons for different buyers to participate. PayPal will bring a tremendous amount of utility to these four coins and any additional coins they may add. Also, we do think PayPal will eventually support more coins - it is too beneficial for them not to do so.
The major question will be the tax implications, but that is a topic for another day.
Ethereum is On Schedule!
Deposits into the Ethereum 2.0 contract reached the necessary threshold ahead of schedule, meaning that Ethereum phase 0 will begin on December 1st. All of the 524,288 (and growing) staked Ethereum can’t be touched until phase 1.5, which is projected to live in late 2021 or early 2022. From a supply/demand perspective, the locked Ethereum cannot be sold and can only grow in number, likely driving up price over time.
IRS Sending Tax Notice To Crypto Holders
The IRS wants a piece of the crypto pie even if they aren't competent enough to understand what they want. Some early crypto holders have reported receiving letters from the IRS about taxes still owed from 2017. Many of the letters were found to be inaccurate. It is safe to expect the IRS will continue to crackdown on collecting past taxes, starting with the big fish and working their way down to the everyday investor. The best way to deal with them is to be completely honest and talk with a professional that that specializes in crypto taxes. Prepare to pay taxes - the collector is coming, especially as crypto gains more popularity.
The Wolf Of All Streets Podcast Ft. Curtis Wood
Curtis Wood spent years learning the ins and outs of both the mobile app and mortgage industries. When he learned about the blockchain, he knew he had to combine the three areas. He developed Mortgage Bee App, a seamless way to automate the loan process for home buyers, leveraging blockchain technology to add trust and remove human error.
Curtis and I further discuss the current state of the housing market, the impact of COVID-19 on home value, historically low-interest rates, the difficulty in obtaining a loan, refinancing for free money, the 2008 subprime mortgage crisis, Dodd-Frank and Fannie Mae, strippers buying 7 homes, the impact of fraud and greed, the money machine in DC, tech as a double edge sword, borrowing against crypto and more.
My Recommended Platforms And Tools
This is where I trade with leverage and can also trade spot with no fees.\
This is where I spend my days teaching and learning! Our Discord group is a one stop shop for everything you need to learn to trade and control your emotions. Feel free to DM me on Twitter or respond to this email for questions.
This is where I invest, commission-free. They now let you earn interest on your Bitcoin held in Voyager, so you can compound while trading. Not only that, you’ll get $25 in free BTC when you download & fund.
Rewards Code: Scott25
I use RoundlyX to buy small amounts of Bitcoin every single day. They automatically round up my credit card purchases (with 10x multiplier) and invest them in crypto. Absolutely brilliant. Passively invest money you don’t need without a thought. Further, they have integrated with Voyager (see above) to offer commission-free purchases.
Rewards Code: WOLF
This is one of the main places where I hold crypto to gain interest. Celsius also offers dollar or stablecoin loans against your crypto, starting at just 1% annual interest. Celsius is giving WOAS followers $20 to open a new Celsius wallet. All you have to do is enter promo code WOLF, then transfer and keep at least $200 worth of crypto in your wallet for 30 days.
My preferred crypto tax software.
Binance is finally available in Florida!
Concierge Phone Service for Americans that protects your from SIM Swaps and other phone related hacks. I cannot stress enough how amazing this service is.
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.