The Wolf Den #185 - What A Difference A Day Makes
Bitcoin Thoughts And Analysis
DAILY CHART
Bitcoin is holding daily support by a thread, with the 2 previous candles wicking below and closing above. I would really like to see today's daily candle still hold that line at $48,690. It is really flirting with that line as we speak.
4-HOUR CHART
I drew it yesterday and it came to be. Another oversold 4 hour bull div, usually a great reversal signal. We saw a beautiful bounce regardless, and have avoided hidden bearish divergence on the way up. I personally think this means a bottom is likely, but nothing is for sure.
HOURLY CHART
The hourly shows a confirmed double bottom with a break of the neckline at $49,582. However, price is currently trading below so we want to see it back above that area.
If you have been with me a while, you know that on any major drop we expect a 50% impulsive bounce as a reaction. We got about 49%. I really want to see more volume and price trading above that 50% level to convince me this is not just a reactionary bounce and is a true reversal.
We also have a nice little bull flag after the move up, although it is not perfect. Still, bullish consolidation after a nice move up is a positive.
Lower time frames look good, but I really want to see convincing follow through.
Altcoin Charts
Alts had a nice reaction over the past few days, but it's too early to call it a reversal. For now it's an expected bounce after a lot of selling. So be very, very careful.
LINA/BTC
This chart looks really good here. A clean breakout from the down trend and price moving away from the descending resistance. Alts are still a bit risky here, I have my concerns that they are just seeing a quick impulsive bounce after the correction, but I like that LINA really was unaffected on the BTC pair. A retest of the purple line as support could be a great entry. Ultimately when this correction is done, I expect this to head up.
MATIC/BTC
I am still in this trade from far below. If you have been seeking an entry and did not buy the recent drop to support, then I would watch for a candle close above the black line. If that happens, I would be looking for a retest of that line as support, which may or may not happen. When you are looking to buy retests, you have to accept that price may not come back. As you can see, there are already a few wick through this resistance without a close above, which is why I would personally want to wait for confirmation to avoid another wick and drop.
Square Buys More Bitcoin
Square is more than doubling down on its crypto holdings.
Jack seemingly bought the dip.
Square made its first Bitcoin purchase of $50M in October when their market cap was $99B. At the time, this purchase represented 1% of their total cash reserves, indicating it was probably more of a test than a serious investment. They have now more than tripled their initial purchase and have announced another buy worth $170M in Bitcoin, bringing their total cost to $220M. They now hold BTC as 5% of their cash reserve. For reference, Tesla holds 8% of its cash reserves in Bitcoin. According to Square, “cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial future. The investment is part of Square’s ongoing commitment to Bitcoin, and the company plans to assess its aggregate investment in bitcoin relative to its other investments on an ongoing basis.”
$4.8B Bitcoin Donation To Miami
Miami is quickly becoming the crypto hub of America and prominent overseas investors are taking notice. A Dubai businessman and investor pledged 100,000 Bitcoin, worth $4.8B, to the city of Miami to support the blockchain strategy foundation. Khurram Shroff, the man behind the donation is hoping it benefits both his real estate development in the city and furthers a connection between Dubai and Miami. Both are seeking rapid tech innovation. Shoff said in an interview that his donation spawned from "inspiration," which feels honest considering his real estate investment will benefit minimally. All eyes are on Miami, potentially America's first Bitcoin city.
MicroStrategy Buys More Bitcoin
Michael Saylor confirmed this morning that MicroStrategy has purchased an additional 1.026B worth of BTC at an average price of $52,765. His money is certainly where his mouth is.
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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.