The Wolf Den #204 - Learn, Don't Copy
Bitcoin Thoughts And Analysis
4-HOUR CHART
As I warned more times than I care to count, bull pennants often lose support and become other patterns. No surprises here, but we need to wait now to see what forms with that break down. The key is a break of the top resistance, regardless of what happens now, which is something I have also mentioned a number of times. We do not have a bull flag here yet, that would require more downside to create a parallel channel.
Bitcoin continues to range between around 61K and 53K. Nothing too exciting.
That said, we had a bullish SFP, which stand for swing failure pattern. This occurs when you see a wick below support but a close above and indicates that liquidity was engineered. In layman's terms, price is pushed down to a level where there's a lot of sell orders so that someone can guarantee they can buy. In this case, lots of people were likely looking to short the range lows. Those are sell orders. Further, people with long open likely had their stops and liquidations below that line - those become sell orders as well.
This is what we talk about when we say "sweeping the lows."
That wick below also formed a nice reversal candle - a bullish hammer.
All of that said - volume on the buy side is weak since that sweep of the lows. We need to see really buying interest step in if we are not going to break down again. Then I will be looking for that bull flag to form, and potentially bullish divergences with RSI. The 4 hour RSI missed hitting oversold by inches, but it was very close.
As you know, RSI eventually makes the trip from oversold to overbought and back. I consider this a trip to oversold personally, but technically it missed. I put that question mark there yesterday.
HOURLY CHART
Hourly RSI reached oversold and made a bullish divergence, which signaled the bounce. So reliable! That said, we could form some hidden bearish divergence now, so we need to see price continue up. Hourly divs are best for scalping. The smaller the time frame, the weaker the signal.
You can also see on the line chart that we seemingly formed a bit of a small inverse head and shoulders, which would be a reversal sign.
News Review
I put out a video reviewing some of the most pressing news in the market. Worth watching if you want to quickly catch up!
Jack Dorsey Sold His First Tweet
Jack Dorsey, the CEO of Twitter, turned his first Tweet, “just setting up my twttr” into an NFT to be auctioned off and sold. Unsurprisingly, irrational exuberance kicked in leading to a $2.5M bid which later turned into a final winning bid of $2,915,835.47 from Sina Estavi, the CEO of Bridge Oracle. According to Estavi, “years later people will realize the true value of this tweet, like the Mona Lisa painting.” Whether you agree with that or not, the story had a feel-good ending because Jack Dorsey converted the bid to Bitcoin to donate to GiveDirectly. The total donated was over 50 Bitcoin to Africans in need.
Brazil Approves A Bitcoin ETF
Another ETF has been approved in Brazil, adding to the three recent approvals in Canada. Under the ticker QBTC11, the ETF will be listed on the Brazilian stock exchange and was proposed by QR Capital. QR Capital has come forward and said that it believes its Bitcoin ETF approval will speed up the process in the U.S.
The CVM which approved of the ETF is the SEC equivalent in Brazil, and both agencies are members of the Internal Organization of Securities Commission. Since QR Capital’s ETF has been approved by both the CVM and IOSC, they are familiar with the progress of other countries in approving their own Bitcoin ETFs. The firm came forward and said in a public statement, “[The] SEC commissioner was already concerned about the authorization of Bitcoin ETFs in Canada. At the time, Peirce was asking the SEC to speed up the authorization of these products in the American market. With the approval of QBTC11, the pressure for a Bitcoin ETF in the U.S. increases.”
Historically, anything the U.S. does is oftentimes quickly adopted by the rest of the world. Brazil probably wants to see the U.S. approve a Bitcoin ETF because it would bring more attention to theirs by native investors. For international companies and funds that operate in both Brazil and the United States, the ETF in Brazil is taking a small amount of money away from what could be invested in a U.S.-based Bitcoin ETF. The same applies for Canada. In the race to ETF approval, every little bit of money and time counts. This is just more added pressure for the United States to step up and approve a Bitcoin ETF.
The Miami Bitcoin Conference Is Heating Up
Since the announcement of the Miami Bitcoin conference, a strong list of additional speakers has been added to the event. The lineup is amazing and includes, Senator Cynthia Lummis, Michael Saylor, Jack Dorsey, Chamath Palihapitiya, Tony Hawk, Nick Szabo, Mayor Francis Suarez, Sam Bankman-Fried, Max Keiser, Anthony Scaramucci, Erik Voorhees, and many more to be announced. Plus, if you pay with Bitcoin, you save $50 on a general admission ticket.
Unido - The Platform For Institutional Adoption
As big players begin to jump into the crypto space with deep pockets, appropriate infrastructure needs to be built for money to easily navigate and invest in the space. Unido solves this. Unido is an enterprise platform for decentralized capital markets. It enables any enterprises who hold crypto on their books, such as Grayscale, BNY Mellon and other neo-banks, asset managers or crypto-native businesses, to seamlessly manage their crypto assets.
To succeed in the crypto market, not only does a new project have to provide a viable solution, but it also has to arrive at the right time. Projects looking to cater to institutional players that arrived back in 2016-2020 may have been visionaries but lacked proper foresight. Unido has both a viable product and excellent timing. Oftens success is just being in the right place at the right time.
The Unido platform offers four main services - the central management platform, a DeFi vault, crypto banking, and Unido Core API. Powering the platform is their native token, $UDO. As more and more institutions pour in this year, Unido can benefit by capturing the market share they bring to the crypto space. Lastly, Unido has established a strong investor backing and has revealed that they have future announcements on the way. If you want to read more, the Unido white paper is linked above. Here is their one page summary.
The Wolf Of All Streets Podcast Ft. Jason Yanowitz
Leaving traditional finance in favor of cryptocurrency, Jason Yanowitz knew he couldn’t work in any other sector ever again. As the co-founder of Blockworks, Yanowitz has not only played a pivotal role in developing media in the crypto space for growing institutional interest, but he has also helped build Melker’s podcast to what it is today. He believes that not only is crypto an improvement on traditional finance, but it is offering the first chance in history for retail investors to front-run institutions’ slow arrival to the crypto space.
In this episode, we discuss a range of topics including:
A Bitcoin super cycle
Learning from Reddit and Twitter
“This time is different”
Coinbase becoming a top 5 company
VanEck’s Bitcoin ETF
Coindesk vs The Wall Street Journal
2017’s frenzy
Crypto’s infrastructure
Regret minimization framework
Short Squeezes and Melvin Capital
Front running institutions
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