The Wolf Den #126 - Whale Bait
Bitcoin Thoughts And Analysis
Bitcoin is playing games with people but remains clearly bullish. Don't lose sight of the forest through the trees. Zoom out.
MONTHLY CHART
Look at the last 2 monthly closes on the Bitcoin chart. Last month closed right at resistance, which was formed by the price of the highest monthly candle close ever.
This candle closed inches below the all time high. What a monthly candle between them! If last month is an indication, we will hopefully see the present monthly candle push through and close well above. Hopefully.
4-HOUR CHART
The present 4 hour candle is fully ridiculous - look at that wick! It broke local support but will close well above. Nothing to see here. Very bullish buying of the dip, as usual.
Worth noting - the blue line is the 50 MA on the 4 hour which I have shared a number of times. It has been a key support on the entire move up, and was just tapped almost to the dollar at the bottom of this move.
Bullish.
Altcoin Charts
I am still mostly watching and waiting on altcoins, but there are a few that I am keeping my eye on. I will continue to share in the days to come.
SUSHI/BTC
I know, I know. This coin has a bad rep, but the chart looks good and that's what I trade. As you can see, it broke the descending line and is now making a higher, confirming yet another move in the bullish market structure. Above the purple line and this should really start to push harder.
Unfortunately I was not able to get this out in time to catch more of the move - I've been watching it since yesterday.
SUSHI/USDT
Supply above demand below (blue areas). This is also breaking the local high. If it flips the blue line to support and pushes through overhead supply, there's no resistance above,
XRP/BTC
I am still convinced that I was first to call the XRP bottom and share potential setups for this coin. It still looks good, as discussed on the livestream yesterday.
This is really simple. We had a huge move up, now consolidation in a descending wedge which has broken out and now been retested. I am looking simply for a move to the top of the wedge, although I expect that if this rises it will continue up further.
On the daily it looks more like a pennant (not drawn, but you get the idea), which would have a higher target based on the length of the flag. So keep this in mind as well. A close above the 3754 resistance would be a safer place to look for an entry as well, since it's been rejected a few times.
Also keep in mind that alts are iffy here with Bitcoin all over the place!
XRP/USD
Here are weekly levels worth watching, as this continues to look very bullish. A retest of .51 would be an amazing entry if it does pull back that far.
This also looks like a bull pennant on the daily. Target shown based on the height of the flagpole.
Legacy Markets
DXY (DOLLAR INDEX)
Quick update: The dollar has indeed retested the bottom of the channel once again as resistance and dumped hard in the past month. I have been discussing this now for a year.
Now we have a lower local low (lower than the previous months) and the DXY continuing to drop. This is generally considered bullish for stocks, metals and Bitcoin. Silver and gold are heading up today as a result.
MSTR (MICROSTRATEGY)
This is NOT a trade setup. This is, however, the most important chart that nobody is talking about. MicroStrategy, led by Michael Saylor, invested a portion of their cash reserves in Bitcoin in August (again in September).
The stock price has nearly tripled since.
This is completely thanks to Bitcoin, which has more than doubled since they invested.
MicroStrategy offers a novel way to gain exposure to Bitcoin for stock traders and investors who do not want to buy it directly. Also, there's no way that every company is not watching this happen and considering exposure themselves.
Trading Tips
This is great advice. Each and every one of these tips will help you better protect your capital and manage your risk, which is the true key to being a successful trader. Write these down an revisit them!
Janet Yellen Is Biden’s Pick
Janet Yellen was a former chairman of the FED and is now poised to be the U.S Secretary of the Treasury. She created a Twitter account yesterday and instantly found 10’s of thousands of followers primarily from the Bitcoin community. Her first post on Twitter was flooded with people mentioning Bitcoin, looking for any crumb she may drop on her current stance or plans. In the past, she has been critical of Bitcoin but has remained silent on the topic over the past couple of years. If she does not comment soon on CBDC’s, crypto, blockchain, and or Bitcoin, the crypto community will likely squeeze it out of her.
Yellen has said she's "not a fan" of bitcoin, warning "it is not a stable store of value"...
"Yellen, who served as chair of the U.S. Federal Reserve from 2014 to 2018 and helped steer the Fed through the aftermath of the 2008 global financial crisis, has previously said she's "not a fan" of bitcoin, warning "it is not a stable store of value."
The key word here is "previously." This is being widely reported as newsworthy, but I think it's important to note that many people have changed their tune on Bitcoin in the past year. I expect Janet Yellen to do the same, although I anticipate definitive regulation coming from the US government in the coming years. It will be interesting to see how it plays out with Yellen as the head of the Treasury, but it seems that the Biden administration is more likely to be pro Bitcoin than the current White House.
Grayscale Says Bull Run "Just Getting Started"
While this article is a bit of clickbait, it is notable that Michael Sonnenshein, managing director of Grayscale, sees interest from institutional investors dramatically increasing.
“If our inflows at Grayscale are any indication of the types of investors that are interested in this asset class or the sizes of allocations being made, we’re just getting started.”
Based on the news that companies like Microstrategy are investing their reserves in Bitcoin, it Is clear that this is not just lip service but that corporations are, in fact, more interested in Bitcoin as a hedge.
Companies Catching Up To Tech
"A wide range of stocks powered the November market rally, a broadening of support beyond the few highflying companies that propelled indexes earlier this year.
With a drumbeat of promising reports on Covid-19 vaccines and the easing of U.S. election uncertainty, stocks surged in November. The S&P 500 gained 11%, its best month since April when the market was rebounding from its coronavirus lows. The Dow Jones Industrial Average, meanwhile, topped 30000 for the first time last week and notched its best month since 1987."
Tech and FAANG stocks have been leading the entire charge back from the March lows... now we can see that other companies are starting to catch up. Hard to be bearish on stocks here, even if that would be rational based on the global economic slowdown.
Facebook's Libra Gets A Rebrand To Diem
The are so many jokes that I want to make here. Like Diem It All To Hell. Or Sliding Into Your Diems. But I will keep it serious,
After facing regulatory scrutiny and pushback, Libra is rebranding to Diem and focusing on a single dollar backed stable coin. It also seems that the Libra Association is less Facebook centric now and is more of a democratic group of individuals and companies working together to launch the coin.
Whatever your thoughts on the companies involved, this is a good bet to be very successful, especially in it's less controversial updated form.
Coinbase Offers Full Support To ETH 2.0
Other major exchanges will likely follow in the path of Coinbase’s announcement to fully support ETH 2.0 staking. Kraken already made their announcement a week ago. This will open the door to a much wider audience of participants that are not comfortable depositing their ETH into an address online. Crypto is still very early in terms of the masses understanding how it works. Normalizing the staking of ETH 2.0 on the exchanges will be great for educating the public and locking up more Ethereum, in turn raising its price.
Bitcoin’s Rise Comes At A Cost
Peak 2017, the Bitcoin network became extremely congested leaving staggering transaction fees and hours-long transfer times. This was a result of Bitcoin transactions piling onto the network, competing with each other to complete. This will likely happen again as Bitcoin goes parabolic because the capability of the network has not been improved by the community.
But fear not.
I linked an amazing thread on how to navigate and prepare for an overcrowded network. Everything you need to know is covered including how to reduce your wait time, lower your fees, and stay safe during the pandemonium.
The Wolf Of All Streets Podcast Ft. Zach Iscol
Zach Iscol grew up in a home with wealthy and loving parents, yet chose to join the Marines as an officer. He served two tours leading an infantry unit in one of the most dangerous parts of the world. He later founded a successful nonprofit organization called Headstrong, caring for our nation's veterans with a focus on mental health. Zach has now thrown his hat into the ring to become NYC mayor, aiming to defeat incumbent Bill de Blasio and turn the city around.
Zach and I further discuss running for NYC mayor, the inspiration to join the Marines, a lineage of military service, saving veterans from poor mental health and suicide, volunteering at the Javits Center during the COVID-19 pandemic, government shutdowns, ranked-choice voting, saving small business, donating thousands of masks, throwing a slot machine overboard, getting your hands dirty as a leader, crypto regulation in NYC and more.
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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.