The Wolf Den #146 - The Parable Of The Ox
Bitcoin Thoughts And Analysis
Updating yesterday's chart, we can see that price did in fact break through the blue resistance on strong volume and move up, quickly hitting the target of the top of the descending line. That is a hell of a scalp long there. That's the good news.
On the flip side, after hitting the target there were 2 bearish SFPs - candles that wicked above that line but closed below. This is a sign that there is a ton of selling interest and liquidity in that area. It does not mean price can't push through it - it just shows there is a lot of resistance. Price could easily consolidate against resistance before another push up. Further, we have very clear confirmed bearish divergence with overbought RSI on the 4-hour.
In a vacuum, meaning if you ignore everything but the chart, this is a textbook short for a trader that uses RSI divergences. I am not particularly interested in shorting Bitcoin right now, or trading during the holiday. It is also worth noting that RSI has not made the trip from overbought back to oversold yet, which is inevitable. Price does not have to move tremendously for that to eventually happen, but RSI will get there at some point.
Taking a long here is against a divergence and into clear resistance, so not something I would personally do either.
I would love to see a hidden bullish divergence print (like December 23rd) to "cancel" the bear div before thinking seriously about trading this again, unless I was shorting.
Regardless, you can look back at previous 4 hour divs and see that they can build up. From December 17th - 20th, we saw price continue to rise, making more divs before the drop. So it's really hard to time a short here when Bitcoin is acting bullish.
All higher time frames still look massively bullish.
My Top 10 Holdings By Dollar Value
I meant to share this in the newsletter yesterday, but it slipped through the cracks. Many of you often ask, so here are my Top 10 holdings (including both investments and trades) at this moment in time. This will change, there are many more, and as they rise or fall in price or I buy and sell they can enter and leave the top 10. But this should give you an idea of where my head is at for now.
Some of these are a result of early investment, some are trades that went exceptionally well, some I have dollar cost averaged into.
Bitcoin and Ethereum will always be my top 2. I also hold USDC on Voyager, Celsius etc. for interest. When I take profit, I generally move into USDC and park the money there for taxes, earning yield.
I recently invested in the company Elitium, hence the large position in EUM. Like many of the coins I invest in, I CANNOT sell these. They are long term holds, because they vest with time or release after a year or more.
Polkastarter I invested in the presale, held the coins I have and bought all of the dips, which I have shared. All coins are now released, but I have no intention of selling.
Swissborg (CHSB) I took an investment in OTC directly with the company a few months ago.
Elrond - by now you should know how bullish I am on this project and I have always been buying.
YFL I was one of the few first people involved in the premine. I have bought and sold this countless times, but was fortunate to be a buyer at a few dollars before it went to almost 2K.
UTK (Utrust) is a company I am extremely bullish on and have been working with to add crypto payments to this newsletter. I am a huge fan and have bought a number of times for the long term.
YFDAI I was lucky. I bought at $40 and it went over $3000. I have still not sold most of the position.
Analyst Who Called Coinbase XRP Delisting Claims SEC Isn’t Finished
Adam Cochran is the name of the analyst that publicly announced before it was known that Coinbase would delist XRP. He has now come out and said that the SEC isn't stopping here and is investigating a number of other projects, one of which is “big.” He further stated, “these ones aren't at the lawsuit stage yet, but seem to be at the active investigation stage.” He is working on confirming the rumors by submitting paperwork through the freedom of information act. He claims that his request would provide information with 100% certainty. If the SEC had this much of an impact on Ripple, it seems more than likely they would continue their march forward, taking down any crypto they find non-compliant. If you’re looking to play it safe as an investor, the only coins deemed a “non-security” by the SEC are Bitcoin and Ethereum.
Investors Want To See Funds Investing In Crypto
Upon the announcement that Greenpro Capital Corp was setting up a crypto fund to invest in Bitcoin and Ethereum, its stock jumped over 80%. This partly is the result of traders creating a self-fulfilling prophecy around this type of news, but the facts are clear. The funds and companies that are stepping into the crypto investment world are seeing strong gains on the legacy side. MicroStrategy and Square have continued to see their stocks rise and Bitcoin is definitely playing a strong role. This type of action is the icing on the cake for all the companies considering making the jump to Bitcoin. Plus, Ethereum’s name was in the article and is gaining more traction on the institutional front. I think it's institutionally under valued at the moment leading me to think it has strong upside potential in the near future.
Gazprom Using Excess Energy To Mine Crypto
This is so cool. Gazprom, the biggest oil and gas giant in Russia, is using the leftover CO2 from their drilling, usually a huge liability, to power mining farms in Siberia. Read the article.
Whales Are Moving Coins
There is nothing important to gleen from this news, it's just so interesting to watch the movement of billions of dollars of coins, transparently on the blockchain. None of them were sent to exchanges, which is always good news - one of the whales removed a ton of coins from Coinbase. That is also good news, because it means he is not selling.
My Recommended Platforms And Tools
This is where I trade with leverage and can also trade spot with no fees.\
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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.
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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
The platform I am using for my taxes. My trades were automatically imported after setup and displayed nicely. The tax report was quick and easy to create in the app. I can also track the performance of my assets in the app. With Blockpit, I no longer have to worry about realizing profits or losses in time.
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.