The Wolf Den #208 - SNL Goes NFT
Bitcoin Thoughts And Analysis
WEEKLY CHART
The weekly view is a bit muddled, but leaning bullish in my opinion. As I discussed last week, we had a "hanging man" candle, which looks bullish because of the long down wick, but is considered technically bearish at the top. Now we have a second hanging man, which in my opinion does not really act as confirmation for the first one - you would want to see a more clearly bearish candle if you were looking for a top. So we have some more indecision, but very, very clear buying interest and demand. Rationally, it seems like bears tried and failed, but we once again need another clear candle to confirm what is likely to happen next. A big red candle closing yesterday would have been bad - seeing the buying come through before the close leaves me optimistic. I think we will see a green candle this week and be all systems go, but that's just my opinion.
DAILY CHART
Perfect test of the 50 MA and launch. That is what we discussed last week and it absolutely happened. Further, today's candle already has as much volume as either candle this weekend, so it will close much larger. That, in conjunction with an attempted break of this descending resistance could be a very bullish signal - if we close above resistance! The day is young.
When you look at the line chart which is based on closes and eliminates wicks, you can see that we had the breakout a few days ago. Further, you can see the RSI had the same descending resistance and broke out a day before price on the line chart. I talk about this frequently - it's a great tool to draw pattern on indicators because they often precede the same move on price. So we had an RSI breakout, a line chart breakout and now a potential candlestick chart breakout using the wicks. Confluence of bullishness in succession.
4-HOUR CHART
Beautiful chart. Bounced right out of demand at the bottom, came back up and flipped both the 200 MA and 50 MA back to support, both of which are now curling up. Decent volume on the break through descending resistance and a potential retest happening now. Not much to dislike here!
HOURLY CHART
The bull flag on the hourly line chart finally saw a breakout. Technically, the target is in the low 70ks. All of this was preceded by... a bullish divergence with oversold RSI. Watch for a potential retest of the flag as support if price drops.
Altcoin Charts
Altcoins are starting to show some potential again as Bitcoin rises and stabilizes. While I have not shared too many trades of late, many have done exceptionally well - Ethernity, WABI and Solana have all been massive. Others have barely moved or dropped slightly - inevitable. Here are a few charts that I am watching today.
BNB/BTC
This is a high risk, high reward setup. Price broke through the descending red resistance, but the volume was not meaningful to confirm. Price has come back down to test as support twice and without any major bounce. That said, taking a position here (I am personally not doing it) with a somewhat tight stop has a TON of upside with minimal downside. Good risk/reward. The target is the top of the range - 65300. So if it does bounce here out of this local demand and descending support, there's tons of upside.
If you take this, accept that it's likely to be a loss and size accordingly.
DUSK/BTC
I set an alarm on DUSK for a breakout from the bull flag on a live stream last week. This flag is not technically perfect, even though it has multiple touches to the top and two to the bottom. Technically they should be alternating, but the idea remains the same. Regardless, price broke through resistance and did so on massive volume, which is nice confirmation of the breakout. The target of the move based on the length of the flagpole is shown - 929 sats. That would be a huge move from the current price. T
If you are trading it, you can wait and see if it retests the top of the flag as support - this is the safest entry because it offers confirmation. However, many times that retest never happens and price continues up! That is my preferred setup. Totally up to your own level of risk. You can also buy now or even wait until price passes through the recent highs at the top of the flag. Do what works for your system.
MINT/USD
Contract Address: 0x0cdf9acd87e940837ff21bb40c9fd55f68bba059
This is charted on DexTools, I cannot provide a link. I am trading it on Uniswap and Matcha.
Public Mint is a coin that I have been watching for quite a while now. It had a ton of hype around the IDO and the chart has shaped up like a lot of the bullish launches we have seen of late. You can see that it had the rounded bottom pattern that I love on these coins and a strong breakout through resistance. Now it seems to be consolidating in a perfect bull flag after the move up. Further, it is trading in the top half of the flag and is currently flipping the Equilibrium (EQ, center line) back to support.
The real trade is a strong break of the upper resistance. If we see that, the target is shown based on the length of the flagpole, but depends on where the breakout actually occurs. Either way, looks like a 2x would be likely.
Visa Will Use USDC To Settle Transactions
Wow! Visa continues it's exploration into crypto by announcing that they will use stablecoins to settle transactions in a new pilot program. "As part of a pilot program, Visa is using USD Coin to settle transactions over Ethereum, with the help of the Crypto.com platform and Anchorage, a digital-asset bank, according to a statement Monday by the San Francisco-based payments giant. Visa will offer the service to more partners later this year."
Bullish.
BNY Mellon Bitcoin Report Is Bullish
BNY Mellon is the world's largest custodian bank, and recently made headlines saying that they were moving aggressively into the Bitcoin space. It is hard to quantify just how insanely bullish this is, knowing that the largest companies, endowments and pensions etc in the world now have a trusted custodian waiting in the wings to secure their assets.
They just released their full document on Bitcoin and how it should be valued. There is far too much to summarize - you should absolutely read the entire documents. I loved this quote.
“The models imply that as Bitcoin gains momentum and is viewed like gold, the scarcity and subsequent halving will drive prices towards gold’s market value,” - Bank of NY Mellon
Cathie Woods - Bitcoin Bull, Bull, Bull
In a recent interview, Cathie Woods, the CEO of Ark Investments made a number of positive statements about Bitcoin that I wanted to share below:
“If we add all the potential demand relative to the limited supply, we come up with incredible numbers over the long term.”
“The $1 trillion milestone is nothing compared to where this ultimately will be.”
“The correlation of returns to other asset classes is extremely low. In fact, according to our analysis, the highest correlation is to real estate 0.34. "
And my favorite of them all, “we do believe this is the first new asset class, truly a new asset class since the 1600s. Since equities."
Is A 20x Bitcoin Price Possible?
Twitter user ChartsBtc posted a graphic breaking down Bitcoin’s past 3 cycles, including the current one, into 4 separate epochs. Each cycle was positioned on a scale with targets 20x larger than the previous. In the first epoch, Bitcoin went from a valueless asset to over $25, then proceeded to 20x from the 1st halving to the 2nd halving, and almost 20x from the 2nd halving to the 3rd halving in its cycle peak. From this framework, a 20x from the last cycle peak would mean Bitcoin would have to reach $400,000 - an optimistic goal, but not out of the realm of possibilities.
Looking closer at the numbers, from Bitcoin’s 2nd epoch to its 3rd epoch, the cycle top was closer to an 18x. If the cycle top from the 3rd epoch to the 4th epoch is a 16x, that would place Bitcoin’s top price this cycle at $316,000. It’s really just a guessing game on where the top will land, and charts like these offer more hopium than actual TA, but they are fun to look at nonetheless. In the end, it will come down to a number of factors that nobody can predict, primarily being timing, retail inflows, corporate interest, and unforeseen major news stories.
Ethereum Scaling Is Delayed
A few weeks back, I covered Ethereum’s progress on solving its scalability issues and quoted Vitalik saying that “100x scaling should be coming to the network soon” to relieve the congestion. In true Ethereum fashion, the scaling solution called “Optimism” has unironically been pushed back to at least July. It was supposed to arrive this week, but instead it faces delays and Ethereum users will have to pay a heavy price to continue using the network.
The delay is disappointing, but I don't view it as a reason to drop your bags and capitulate. Ethereum is still massive and its network remains in high demand. Releasing 2.0 and a short-term solution may feel far away, but it will be that much sweeter once it comes. Eventually, the growing pains will subside and those that waited patiently will be reward handsomely.
I am sure that most of you saw this. I have no comment on the actual sketch, I just find the meteoric growth of the NFT space absolutely astounding. This is likely an early "top" signal for much of the NFT market and I expect there to be a bubble pop of sorts, much like DeFi last summer and Bitcoin in 2017. I love NFTs and believe the quality work will survive and continue to thrive, but this is getting a bit ridiculous.
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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.