The Wolf Den #164 - Reddit Vs. Wall Street
Bitcoin Thoughts And Analysis
Nothing has particularly changed since yesterday. Although Bitcoin is down, this still is nothing but sideways chop before an inevitable decision.
4 HOUR CHART
Quickly revisiting this idea. As you can see, price is currently finding support at the equilibrium (EQ, center line) of this theoretical channel. Looks fine for the moment.
To be balanced, here is a slightly more bearish case, although nothing terrible.
Price looked like it had confirmed an ascending triangle, but as we know TA is not 100%. It may have been more of an ascending wedge that has broken down and been retested as resistance. The target of this would be the bottom of the pattern near the lows, so worth watching if we drop.
HOURLY CHART
We rarely zoom into the hourly chart, but at the moment we have a clear and confirmed bullish divergence with RSI. Remember, the smaller the time frame, the smaller the expected reaction, so this is not necessarily a reversal sign, but more a decent sign to scalp a long if that is your style.
RSI has not reached oversold yet, so I would not be surprised to see that happen at some point.
BOTTOM LINE: This is all chop and there's no good reason to trade Bitcoin right now unless you are focused on smaller time frame moves.
Altcoin Charts
I am exercising caution still in the altcoin market, with Bitcoin Dominance rising and Bitcoin shaky. The setups from yesterday are good - I am looking for drops to support as ideal entries.
ETH/BTC
A fresh look at the ETH/BTC chart shows a massive inverse head and shoulders pattern that started in 2018. The neckline was just broken on the last weekly candle and is currently being retested as support. This is in confluence with the TA yesterday looking at this differently, so really interesting. The target of the pattern is determined by measuring the depth and then taking the same measure move from the neckline. You can see it above, represented by the red line at .0654.
I remain bullish on Ethereum long term, even if we continue to see rejection at the all time high on the USD pair.
Remember this is a weekly setup that took YEARS to play out. Expect the gains to be tedious as well.
Legacy Markets
SIRI (SIRIUS XM HOLDINGS INC.)
I bought this (more as an investment than trade) last week when the weekly candle was sitting on the 50 MA. There are a number of ways to approach this as a trader.
We have a clear ascending triangle, with touches down, up, down and up. 2 alternating touches on each line confirm the pattern. At this point, the "safest" play is a break of the triangle top and a retest as support, which could take a while. That is at $6.73. Any touch of ascending support is a good potential entry, as well as a retest of either the 50 MA (blue) or 200 MA (red). Price is currently pushing through the latter.
As I said, this is an investment for me, more based on fundamentals. But the chart also looks very good.
Zooming out, you can see that the target of the ascending triangle is in confluence with a key resistance from years ago. That would be more than a 50% move from current price.
The GBTC Trade Explained
This is a comprehensive look at the Grayscale Bitcoin Trust and how big money is using it to make billions of dollars. This would be eliminated by the introduction of an ETF, and there are better products coming to market (see the podcast today with Steven McClurg from Valkyrie).
No need for me to summarize, read the thread!
Sifchain - The World’s First Omni-Chain DEX
Sifchain is an early-stage project that recently caught my attention. It is a DEX, (decentralized exchange) aiming to support the exchange of a wide variety of cryptocurrencies with cost-effective orders. The tokenomics are simple to understand: Sifchain consists of two-sided liquidity pools in which one of the tokens is Rowan and the other is an external token such as BTC, ETH, or XLM. Furthermore, Sifchain has a deep understanding of open-source development which is clearly becoming the trend of the future. I found this excerpt from their recent Medium post fascinating: “open source developers are more interested in the status and credibility they receive from their peers for making useful tools that other developers can benefit from. This can lead to bizarre outcomes in which tech investors’ dollars do not end up going to the developers of key libraries on which their portfolio companies’ products rely. This is a critical flaw in the labor economy for developers that all cryptocurrency projects inherit.” Overall, the project is in the early stages of development - it hasn’t had a token sale so it can’t be traded yet. I am planning to follow their progress closely and report back as I have more information. It's on my radar.
Prestigious University Endowments Are Buying Bitcoin
An unknown source reported that Harvard, Yale, Brown, and other top universities are allocating their endowments to Bitcoin. These endowments have already made it known that they invested in blockchain VCs a couple of years back. No university has commented on the announcement and neither has Coinbase -the platform that the purchases were alledgedly made from- but Coinbase’s year-end report did mention university endowments, confirming the rumor is based in fact. University endowments have deep pockets - Harvard’s is 42 billion, Yale’s is 30 billion, and Brown’s is 4.7 billion. For the sake of reputation, these universities will certainly share the news once they are finished buying and well in profit, but for now, they may still quietly be accumulating. Once this becomes publicly confirmed, it will bring a lot of legitimacy to the crypto space when the world sees the “smartest” institutions have privately accumulated Bitcoin for an extended period of time.
Janet Yellen Is Confirmed
Janet Yellen has been confirmed as Treasury Secretary by the U.S. Senate.
Janet Yellen has officially been confirmed. Her induction as the Secretary of the Treasury Department will play a big role in crypto regulation, one that I plan to watch and continue to update for all of you.
The Wolf Of All Streets Podcast Ft. Steven McClurg
Steven McClurg is leading the race towards mainstream adoption of Bitcoin and the acceptance of an ETF. According to Steven, once an ETF is approved, institutional players will finally have a chance to put their reserves, investments, cash, and balance sheets into Bitcoin. This episode contains everything you need to know about the race for an ETF and institutional adoption.
Steven and I further discuss esoteric money management, emerging markets, structured credits, close-knit mutual funds, asset-backed securities, Tesla as a proxy to oil trading, the GBTC premium, family offices, endowments, insurance companies, and pensions exploring Bitcoin, the degradation of the dollar, 500k Bitcoin 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
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. 10% discount using the link above!
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.