The Wolf Den #196 - Institutions Are Not Perfect
Bitcoin Thoughts And Analysis
Bitcoin continues to look strong, even with the small correction in the past hours. I have analyzed it exhaustively of late, so I will just share my views once again on the 4-hour chart, which seems to be a really clear time frame.
This is a beautiful chart. Clear break of the range below and retest as support before moving to the next resistance - $55,046. This was broken and retested as support on a few candles. The candle closing now dipped below and then closed above with a nice long down wick. That is a bullish candle. The resistance in supply above was predictable - it will take a lot of buying to push to new highs.
This looks like accumulation - a bit of an ugly inverse head and shoulders but it clearly rounded at the bottom and has retested the neckline of this pattern as support.
Finally, we have a clear hidden bullish divergence with RSI confirming. This is a nice signal of continuation after seeing RSI temporarily hit overbought. Nice to see if you are feeling bullish.
Altcoin Charts
I am still hesitant with alts at the moment, knowing that Bitcoin is at a key area. If it blasts up through resistance to new highs, alts will likely suffer against Bitcoin (they will probably rise some on USDT pairs, but not as much as Bitcoin). If it drops again, alts would also suffer. The best scenario for altcoins would likely be a nice long consolidation for Bitcoin, but I am not confident we will see that. I just scanned through Binance, and more than half the coins are red. So even though there are some good moves, most are still suffering today.
DAO/USDT
I charted this on DEXTools and cannot share the link, so the image above will have to do. This can be traded on Uniswap
Correct contract: 0x0f51bb10119727a7e5ea3538074fb341f56b09ad
After a really amazing launch and rise, DAO went into a corrective phase, dropping from the top. It appears accumulation is potentially coming to an end. You can see a nice rounding bottom that has formed, with key resistance levels marked. Price is currently attempting to flip the level at 4.4644 to support, which would be bullish. Ultimately, we want to see price trading above the swing high at 5.247 to confirm, but the general shape of the recovery and continued rise of price makes me confident that this is reversing.
Remember - there are NO STOP LOSSES ON UNISWAP, so size your position accordingly. I trade very small on these coins when I take positions, knowing that there's always the chance that something could happen and it could drop fast. Nothing to do with this project specifically - just the only approach for managing risk on low cap DEX coins.
Legacy Markets
DXY (DOLLAR INDEX)
When in doubt, zoom out. Nothing has changed on the monthly chart for the DXY, after breaking down from the macro ascending channel that it was traveling in for a decade. It has found a bit of support in a predictable area of demand for the moment, but that does not mean it's a reversal yet. Anything is possible, but for now this looks like just another consolidation. I will reassess if we see more strength.
Why does this matter? Because almost every other asset is inversely correlated to the dollar. When it drops, stocks, metals and even Bitcoin tend to rise.
Looking at the daily, the dollar was soundly rejected in the resistance area that I outlined a few days ago. Until it is above that area, a dollar reversal to the upside is not on my radar. It has a long way to go to prove that this is anything but another small bounce on the way to money printing hell.
Chart Requests
Every Wednesday, I do a live charting session with requests from paid subscribers. Yesterday I looked at:
$AAVE $AI $ALPHA $API3 $AXS $DUCKK $ETH $EWT $F $FTT $GSWAP $IOTA $KSM $LINK $LTC $LYXE $NIO $OCEAN $ONE $POWR $RAY $REN $RSR $SAKE $SOL $SUPER $SUSHI $TVK $XMR
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Stablecoins Are A Major Reason To Be Bullish On Ethereum
According to a new research report from The Block, in 2020, 70% of all stablecoins ran on the Ethereum network. The next closest competitor was Tron, which had a little under 30% of the market share. Ethereum’s dominance is meaningful, considering that in 2020 the total supply of stable coins grew tenfold. 2021 is shaping up to be another year of endless milestones, with many exchanges reporting higher volumes in January than the entire year of 2020. Ethereum clearly has real-world use cases, considering the majority of the crypto market is being built on top of it. The clearest example right now is the explosion of NFTs, which directly rely on Ethereum. Ethereum has a lot of room to grow in 2021 and it will probably end up surprising a lot of people.
The Token Taxonomy Act Is Back
This is the 3rd time this bill has been introduced to the House of Representatives and hopefully this time it will stick. With no major changes, the bill aims to “exempt certain cryptocurrency tokens and digital assets from US securities laws” and also “make crypto-to-crypto transfers tax exempt and change the tax structure for cryptocurrencies held in an individual retirement account.”
The odds of the bill passing seem low considering how far reaching its advantages are for the crypto space. Furthermore, the federal mandate would wipe out the individual rights of states to write and create their own laws around digital assets. - something that we are seeing in real time in forward thinking locales like Wyoming. Realistically, the bill will only raise awareness around some of the issues faced by crypto investors and enthusiasts with regards to legislation and taxes.
NFTs Could Soon Be Used In Everyday Life
NFTs, or non-fungible tokens, have taken over DeFi as the next hype train to gather speed hurtling across the wild west plain that is blockchain. But they appear to have hit a mental snag for many people. They are simply not relatable, nor are they of much use to most of us.
There are a few different companies that are currently exploring the ability to add attributes (utilities) to NFTs. This not only allows for the assets to become more “relatable” and “useable”, but the value starts to get detached from its uniqueness to some degree, and starts to become attached to its usefulness.
Property is one of the most lucrative investment assets across multiple eras, not because they are rare or unique, but because they are something everyone needs and can use. And when you combine unique or rare aspects to the usefulness of property, you get some very expensive assets.
Origin, Opensea, EtherCards, and Enjin are just some of the projects that are exploring this with NFTs. Make sure you read up on how these projects are making waves in the NFT for a more detailed blog arriving soon.
Author: Joshua Mapperson
The Wolf Of All Streets Podcast Ft. Robert Breedlove
After exiting the hedge fund world, Robert Breedlove’s fascination with the concept of money grew. In a pursuit to better understand its foundation, Breedlove dove headlong down the Bitcoin rabbit hole and came out the other side in full support of an evolved financial system relying on hard money principles and freedom, aka Bitcoin. Now Robert hosts the “What is Money Show,” in addition to prolifically writing about Bitcoin, blockchain, and crypto at some of the deepest philosophical levels.
In this episode, Robert and I discuss a range of topics including:
Answering the question: "What is money?"
Thinking in dollars
The study of central banking
Why pay taxes if the government can print
A digital age renaissance
The central bank scam
Bitcoin as a barometer
Freedom of economic speech
The 5 properties of money
Enrichment vs dilution
Bitcoin as a call option on the future gold standard
Physical vs. digital gold
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Binance is finally available in Florida!
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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. 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.