The Wolf Den #183 - The Truth On Buy And Sell Walls
Bitcoin Thoughts And Analysis
Bitcoin has seen yet another quick dip, causing a load of bearishness in the community, a lot of top calling and panic. Anything can happen, the market looks admittedly shaky, but my bias is still up. Nothing has happened yet that we have not seen over and over again in the bull market. Dips have been consistently temporary. I have no idea if this one is over yet, for the record. I am not interesting in trading this price action at the moment.
WEEKLY CHART
The weekly chart look bullish The last few candles have been massive, with almost not wicks up top. They have closed near their weekly highs, which is considered very bullish. The current candle is only a few hours old, so impossible to consider. Nothing on this weekly chart shows a reason for the top to be in, but anything is always possible.
DAILY CHART
Price has not quite reached the target of the bull flag. It's important to note that patterns rarely reach their full target potential and this is "close enough." That said, I think that this is still going to reach those levels and higher.
I have drawn support levels below, in case Bitcoin does continue to retrace here. No drop at this point would be bearish, in my opinion. Bitcoin (and every other asset, ever) always sees healthy retraces during a major bull run. Bottom line, you can't get scared because of one ugly candle, as nothing has fundamentally or technically changed. For all we know, Michael Saylor just filled his bags at 54K.
4-HOUR CHART
I have showed the last 4 "dips" in the market, including the one that we are currently experiencing. Each and every dip has lasted a single 4-hour candle, before slowly drifting up. Many affectionately call this pattern the "Dalai Lama." Price seemingly starts a major move down, traps shorts and then slowly floats right back up to where it started. You can see the last 3, and my drawing for what could happen this time. Only an idea, but might as well use it until it doesn't work.
HOURLY CHART
I rarely zoom into the hourly chart, but this is an interesting move and worth discussing. The last hourly candle was a dragonfly doji of sorts (technically the open and close should be exactly the same and at the very stop of the candle) or a long-legged doji. I have included information on both below. Some would call it a "bullish pin bar."
Regardless, a candle with a long wick down and small body that is green is considered a potential reversal signal. This would be technically confirmed with a green candle following, which we have very early in the next hourly period. Hourly chart, not that compelling but fun to look at. The lower the time frame, the less meaningful the move.
We also have price wicking through the key local support - the bottom of the last drop. That indicates that we have found some buying interest and liquidity at these levels and that bears will have to push harder if they really want price to drop further. As you can see, the last down candle ended up green and with significant volume. So there were lots of buyers there at the bottom.
RSI did NOT reach oversold on the hourly on the drop, so if price comes down further I would watch for that to happen and see if we can get some bullish divergences.
Altcoins
The market has been shaky for BTC, which usually means it is even more shaky for altcoins. I personally don't see a reason to be trading them at this moment. I also did not share any meaningful setups on Friday, besides BNB which has continued to push hard. I am going to wait and see if BTC settles down here before considering any alt coins trades. I know it's disappointing when I do not share setups, but it's important to remember that a huge part of trading is the ability to decide when NOT to trade. I would never share charts when I am really unsure what the market is doing.
Legacy Markets
DXY (DOLLAR INDEX)
As predicted, the small move up on the DXY was just a hiccup on the way to further price depreciation. It did not even make it all of the way up to retest the bear flag as resistance. It filled the small gap left a few candles ago and has once again dropped. It is still finding support in the same area here, but my feeling is that it will likely continue down once it pushes through this area. Dollar down is good for stocks, Bitcoin (less inversely correlated the past few months) and metals.
Conspiracy Theorists Question Elon Musk and Doge
Any sudden movement from Elon Musk can have a seismic impact on the crypto markets. In a recent interview, Elon said that he had to be careful about what he says in regard to Bitcoin, because any statement can move the market. Immediately after the statement, price jumped. The newest speculation revolves around Elon Musk’s new Twitter profile - a fork in the middle of the road. Larry Cermak, a respected crypto researcher, has half-seriously and half-comedically connected dots that potentially Elon’s fork could relate to a Doge fork. Elon lives a life almost nobody can relate to and, for some reason, crypto Twitter has become his mental playground. Nobody knows for sure why he does what he does, but it's certain that every action he takes carries a lot of weight. For the record, I do not believe his avatar has any significant meaning.
Christie’s Auction House Accepts Ethereum
The buyer of Beeple's NFT work will be able to pay with ETH later this month
The world’s largest multi-billion-dollar auction house is preparing to sell an NFT called, “Everydays: The First 5000 Days.” An official comment from Christie’s regarding the auction was, “To our understanding, ETH is the favorite currency of NFT collectors, and we want to make this transaction as simple and as attractive as possible for that established audience. It’s the perfect opportunity to explore cryptocurrency because we have the perfect seller who is happy to receive payment in ETH.” It was when one NFT sold for $3.5m back in December that Christie’s began to show interest in the market. This sale is a huge milestone for the crypto art community, bringing recognition and legitimacy to their work.
Mike Novogratz Thinks Bitcoin ETF Is Near
Mike Novogratz, a billionaire hedge fund investor had the following to say about Grayscale and a Bitcoin ETF:
“So if you want to think about it, it’s hedge funds arbitraging retail. That’s what it is. There’s no other way to think about it. So you’re the SEC, you would not let an ETF through, but you let this project through where retail is getting the short end of the stick. Makes absolutely no stinking sense. I cannot believe Gary Gensler will let that go on for that much longer...
What is I think is going to happen is the SEC is going to allow an ETF, which is better for retail. The ETF is going to drag all the new liquidity and that premium on the Grayscale Trust is going to collapse… I think within the next 12 months.”
With Canada’s recent ETF approval, it's only a matter of time until the US approves one and it will be big news when it does. Hopefully, it happens before the end of the bull run.
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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. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.