The Wolf Den #173 - Tesla Finally Buys
Bitcoin Thoughts And Analysis
Tesla bought Bitcoin and the number went up... but it was ALL already in the chart.
DAILY CHART
I shared this chart almost every day for the past 2 weeks. After the last Elon Musk pump, we formed this perfect bull flag. It was only a matter of time before we saw a move to the top, especially after seeing the EQ (center line) hold as support. Technical analysts believe that everything is in the chart - the news always seems to land at the right moment.
Price actually broke out of the flag a few days ago, and on the dip yesterday came back to test it as support, as I predicted and wrote about numerous times. Look at it. That wick down yesterday hit it to the dollar. That was a hell of an entry if you were not already in.
And now Bitcoin is back in price discovery for a new all time high. I think that much higher numbers are clearly now in play.
4-HOUR CHART
I also shared this idea yesterday, alongside the retest of the flag. Here is that chart now:
Charts work because human behavior is predictable. The community was bearish as support, as tends to be the case. Shorts were punished as a result.
As you can see, price broke the range highs, which was the all time high as well. If you can get a retest of that range as support, it could be an ideal entry. Price may not come back down to retest that level, but the box shows the area I am talking about.
Altcoin Charts
Today is clearly not the day to be trading altcoins. While the USD value of some has held steady, the BTC move has largely hurt them in the short term on those pairs. Unless you are trying to catch falling knives and buy bottoms, I think it's best to wait for them to shakeout and then figure out what coins we want to target. Alts could see a lot more red if Bitcoin continues up to 50K or beyond.
In other news, the setups from weeks past have been doing great, none better than EGLD which almost hit $200 TODAY! That's almost a 20x from our recent entry, with multiple entries along the way. Absolutely incredible. MATIC and ATOM were also in the midst of massive moves before BTC pumped and still look good. Let's give it a day or two.
Hope Is Not A Trading Strategy
The impulse to be hopeful in markets is part of human nature. When you are fixated on a specific result but stymied on a price/time basis, hope becomes a dangerous four-letter word.
There is nothing inherently wrong with hoping that a trade will go your way. However, many traders depend solely on hope to determine their exits and entries - and hope can rapidly to turn to fear and greed.
Hope is contingent upon outside factors happening in your favor, so you become a cheerleader, hoping things will turn around or go your way. This is a very frustrating position to be in. Eventually, emotions take over. You may begin to doubt yourself. Instead of following the lead of the markets, you get angry when the markets don’t follow your lead. This becomes a downhill spiral, and it’s one that is very hard to recover from.
Traders should have a fixed plan every time they enter and exit a trade with 3 prices in mind - entry, exit and stop loss. Period. These should not change after the trade is executed. This eliminates hope from the equation.
Pay attention to the market action. Stop trading on hope. Stop wishing for a certain outcome. When money is on the line and volatility is elevated, tread carefully and trade your plan.
Elon Musk’s Announcement Slows Exchanges
Elon Musk's announcement that Tesla has purchased 1.5B in Bitcoin is single-handedly slowing down exchanges, with lags and massive amounts of traffic. Binance, the world's largest exchange was one of the exchanges affected by the announcement. Exchange infrastructure will continue to scale, but will continue to be outpaced by events like these. Access to multiple exchanges and platforms for selling is a must as institutionalization fast approaches.
Bitcoin’s Marketcap Is Flipping Tesla’s
At the time of writing this, Tesla’s market cap is at $830B and Bitcoin’s is at $815B. It’s only a matter of time until the Bitcoin market cap surpasses Tesla’s and then takes on Microsoft, Amazon, and Apple - all of which are in the trillions. As influential as these companies are, Bitcoin brings more to the table than a single company. It logically follows that its market cap will eventually swallow the largest companies in the world.
China’s CBDC Continues To Develop And Succeed
As China has continued to roll out its own CBDC, other major countries like the U.S. have seemed to have taken the attitude that it's better to not be the first so as to observe and learn. Whether this is a convenient cop-out or legitimate strategy, major news sources are reporting further success in issuing the digital Yuan to the people of China. Over $17 million of the DCEP (Digital Currency Electronic Payment) has successfully been issued around the country to random citizens for spending. With the Olympics scheduled for Beijing in 2022, many have speculated that China’s goal is to have the entire system complete by the Winter Games for a worldwide stage when they announce the release.
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.