The Wolf Den #143 - Happy Holidays! Enjoy And Unplug.
Bitcoin Thoughts And Analysis
You all know that I am very bullish on Bitcoin. Because I have a bullish bias, I find it very important to also look for the bearish case. In my mind at this point, "bearish" would mean a significant retrace, not a macro reversal to new lows. But we should still be utterly unsurprised by a major retrace at some point. So here are some objective views on more downside.
I spoke with Alex Mashinsky last week (the CEO of Celsius) and he made a somewhat "bearish" case for Bitcoin, centered around Grayscale contributions. He is macro EXTREMELY bullish, but thinks we will have a deeper retrace soon - back to around the 16K level. He has been somewhat accurate in the past. This does not align with my thinking, although you know that I believe we should see at least a retest of the high 19Ks, the previous all time high. What markets generally show us is that they go higher than we assume in bull runs, and lower on corrections, so worth keeping this idea in mind.
From a chart perspective, quite literally nothing has changed. The weekly is quite interesting, however.
This candle has not closed yet, so it is somewhat irrelevant, hence the question mark. That said, it is interesting to note that we have had dragonfly and hammer dojis (hanging man) every other week - each of which could have technically been viewed as potential tops. Those a bullish candles in a down trend, but considered more bearish in an uptrend. This shows how important it is to wait another candle for confirmation.
Here is some more information on the "hanging man" candle again. Worth noting, because we could have another one this week.
What else? Well, we do have some other signals of a potential top, one being the diamond formation. This is irrelevant unless price breaks support and heads down. Again, still worth paying attention to.
As you can see above, price is still holding the 50 MA on the 4-Hour which has been a key level of support and resistance on the entire run up. On the more bullish side, statistically a touch of this is likely to send price up, not down. It's support until proven otherwise.
Here is more information on the diamond formation and how to trade it:
Altcoins
LTC/USD
The $94 bids almost filled, but not quite. I still have them, but am a bit wary. If we come back down again, this could easily break support and head lower, because it does look a little toppy (head and shoulders?) and alts are shaky at best. If I fill, my stops will likely be around $88.
Chart Requests
Here is your weekly video, with all of your requests. They are all likely completely invalid by now after yesterday's insane price action! My kids came in and ended the video abruptly, which was cute.
Hopefully we will have more clarity on alts by next week when we do this stream again.
Bad News For XRP
The Ripple Fiasco has taken a turn for the worse now that exchanges are beginning to delist the asset and funds are beginning to liquidate their holdings. No major exchange has announced their separation from XRP, but smaller ones have already come out announcing their discontinued support. Exchanges delisting XRP will forgo the volume but also run the risk of selling an unregistered security. Bitwise 10 Crypto Index Fund announced yesterday their liquidation of XRP, noting their lack of interest in holding a potential unregistered security.
There have also been multiple rumors that Coinbase is planning to delist the asset on Friday. I don't know if these are credible sources, but I’ll go ahead and link the speculative tweets. Delisting the asset would be terrible for retail holders who are still waiting for clarity or a reversal. All it takes is one major exchange or fund to drop the asset and FOMO selling will likely kick in again.
The government should not have this strong of an effect on us - it is the antithesis of the very reason for crypto. Ironically, the first coin shot down tried the hardest to comply with the government. Regardless, an ugly death for XRP would set a bad precedent for the community moving forward, because it hands too much power to the SEC. More coins would likely be sued, with the legal grounding clearly against them. Sadly, the crypto community isn’t working together, but rather turning on itself, with many cheering for XRP's demise. I don't find it funny to see people losing money, regardless of any particular ideologies behind a coin. The news has become worse by the day and any major delisting would likely be the last nail in the coffin.
Stablecoins Received A Healthy Dose Of Clarity
The Presidents Working Group, short for PWG, put out a statement yesterday addressing “key regulatory and supervisory issues” related to stablecoins. The statement was positive in that it encourages innovation in a responsible and compliant manner. The statement went on to claim that future regulation will enable responsible innovation that protects end-users and address potential risks to the financial system. As good as the official statement is, unfortunately, the U.S. government isn't on the same page when it comes to crypto. Too many task forces and agencies are trying to get a grip on the industry and rumors still linger around harmful stablecoin legislation. In a 48-hour timespan, one crypto is sued by one agency and another task force is looking to "protect users and encourage innovation." There is no doubt that 2021 will bring a lot of unexpected regulations.
My Nostradamus Moment
I shared the above tweet on March 16th - 4 days after the "day that crypto died." While it was far easier to be bearish and pessimistic, calling for Bitcoin to go to 0, this seemed the far more measured approach. If you recall, I was calling it a clear bottom from both a technical and fundamental perspective.
I had no idea this would come true, but we have certainly seen the store of value narrative ignited this year. I remain steadfast in my bullishness and optimism.
My Recommended Platforms And Tools
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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.