The Wolf Den #158 - Alt Season Is... A Meme
Bitcoin Thoughts And Analysis
I traded the setup that I posted last week and took a very quick loss when it dropped through the support of the ascending triangle. Price has since ranged, mostly trading above where I stopped out. It happens to all of us!
This was NOT a bad trade! I took the setup that I wanted and stopped out with a small loss as planned. It didn't work out, but I traded my plan.
High time frames all still look very bullish.
DAILY CHART
The daily appears to be showing signs of bullish consolidation. I have not bothered to draw a support line, because it would be steep and would form a pennant. As you know, these pennants often lose support and make a flag (parallel). Regardless, what matters here is a break of the descending blue line. That would be the ultimate signal that consolidation is coming to an end and price is ready to head back up. For now, we can see that we have decreasing volume, which means likely consolidation. If you are taking larger time frame trades, watch the blue line.
4-HOUR CHART
BTC is ranging, looking for a definitive direction. I would draw the blue range based on the all time high and the low of the large recent correction. I personally do not have an urge to trade in this range, because I am not presently scalping on lower time frames. I just tried that, it resulted in a loss and so no reason to try again. I will wait for a larger move, if I choose to trade it at all. For now I am more of a "happy investor."
You can see that price made the low at the bottom of the range, then established a high (the second red x, purple line). We now have a potential higher low, which would be confirmed with a higher high, above the purple line. Ultimately that would be a strong signal this is ready to head back up.
You can see that the green price action cluster was strong resistance as predicted. This will not be easy to push through, although it should be a bit weaker now.
Altcoin Charts
Every single setup from last week has broken out and offered a chance for profit. Not bad! Let's take a look at a few charts.
DOT/BTC
DOT has had "no chill" thus far on this move up, but there have been breakout opportunities to trade, as well as the one retest in blue that I posted before. If you are looking for an entry now and believe this will remain bullish, then the green path would be ideal. I am NOT saying it will happen - price can continue up without retested that line as support, or it can drop right through and head to lower untested levels. But technically, the green line would give an actionable trade with great risk/reward.
INJ/BTC
This once again broke out before I could get a newsletter into your inbox! I was watching this clear ascending triangle, which has broken resistance. The ideal path would be something like I drew in blue, which will NOT happen. It's just an idea showing the key levels that need to be broken as resistance and could be retested as support. Right now, you would be looking for a retest of the top blue line of the ascending triangle as support. Stop losses would be below the ascending blue line and rising with price, in my opinion.
The Bitcoin Phase Transition
One of the most popular historical Bitcoin price charts is the Stock-To-Flow Model measuring current price (logarithmically) and months until the next halving. Price naturally appreciates the most when the chart is in the red/orange category, which occurs shortly after a halving, indicating that there is the maximum number of months until the next halving. PlanB, the popular crypto Twitter user that created the model, pointed out that in the past two cycles there has been a “phase transition” where price makes a huge jump while exiting the red color to orange, leaving a vertical gap on the chart. What's interesting here is that, following the model, the recent price jump to $40,000 did not trigger the phase transition. There will have to be an even more violent rise in price for the phase transition to occur and then we should expect further appreciation once entering the orange color. If Bitcoin were to follow historical price action according to this chart, then a cycle top near 100K seems not only likely, but wildly low. Take this with a grain of salt - it is not a model that I use, but worth sharing because it is so popular.
PayPal Is Booming On Bitcoin
It used to be a risk for a large company to associate with Bitcoin. Now it has become a risk to ignore it. PayPal is expecting 2 billion in revenue by 2023 on crypto, with a 20% overall climb in revenue expected just this year. PayPal has been a strong competitor in the buying market, reportedly buying 70% of all newly minted Bitcoin at one point. PayPal also recently said in an interview that they are committed to the crypto space to, “help shape the long-term role of cryptocurrencies in the consumer payment system.” It is reasonable to believe that PayPal will add further support for new tokens and eventually allow users to own the Bitcoin they purchase from PayPal. This would further add to the already growing demand PayPal is seeing with its service.
Coinbase Is Working To Fix Outages
The time for Coinbase to become reliable is now or never (or years ago!). With its public listing in the works and a bull run underway, Coinbase has to fix its crashing problem or they are bound to lose their status with American traders and investors. Nothing is worse in crypto than a failing exchange at the most prime trading moments, which has become the hallmark for Coinbase. The best fix to this isn't to wait for their update to potentially correct the problem, but to just signup for a new exchange. If you do want to wait, expect Coinbase to announce a major update soon and test it for yourself during heavy periods of volume. I use Voyager, (code Scott25 for some free BTC) and I recommend you do too.
Satoshis Per Person
Find out if you have enough bitcoins already!
The number is always changing but as a rough estimate, there are only 238,100 Satoshis per person in the world. The calculation is based on the world population and circulating supply - which equates to about .0024 Bitcoin or $86 USD. Just a random fun fact.
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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.