The Wolf Den #209 - Slowly, Then All At Once
Bitcoin Thoughts And Analysis
DAILY CHART
Dips are very much still for buying. We are seeing completely normal bull market corrections on the way to the moon. As you can see, we have bullish market structure well intact - a series of higher highs and lows, which I could have actually drawn back many more months. But this is the recent action since the 42K top. The higher low will be confirmed with a break of the all time high, making a higher high. Each low or high is only confirmed when the next one is broken.
This still looks great.
4-HOUR CHART
Nothing has changed since yesterday's analysis. I showed why I believe Bitcoin would continue up today and it has. We had a clear breakout through descending resistance on multiple time frames, a retest as support and continued movement up. Technically this correction is over now that the descending line is broken. I am expecting continued bullishness.
Legacy Markets
DXY
The dollar is showing real strength of late and potential signs of at least a continued reversal to the upside. I remain bearish on the dollar long term, for obvious reason - they are printing trillions and the above chart shows a clear breakdown. That said, time to be very careful with metals and equities in the short term.
The daily chart shows just how strong it has looked in the face of any rational though. Clear bounce, clear break through supply and resistance. The line in the 94s would coincide with the bottom of the macro monthly channel as resistance, so we could easily be heading up there. Rejection there would likely send price further down, but at that point we would have to watch for a potential inverse head and shoulders.
Why does this matter? Dollar up is generally bad for almost all other assets, as they are inversely correlated. This inverse correlation has historically been loosely clear with Bitcoin as well... but not anymore.
Above is a chart of DXY (grey) vs. BTC (blue). The inverse correlation is generally clear - when the dollar goes up, Bitcoin has gone down and the opposite. Well, starting around the vertical line. BOTH have gone up. And it's been a while now. This is very positive for Bitcoin, as we all want it to fulfill it's potential as a truly uncorrelated asset.
Texas Governor Greg Abbott Is On Board With Bitcoin
Quoting a recent Cointelegraph article on Texas’s aim to clarify the role of cryptocurrency in the state, Governor Abbott revealed just how pro-Bitcoin he is. Back in 2015, Abbott signed a bill into law to introduce the nation’s first state-run gold depository in Texas. Effectively, citizens could entrust their precious metals into a government-protected facility rather than their own home or preferred private institution. As far as Governor Abbott’s tweet, it is ambiguous on whether he intends to create a Bitcoin depository or just suggesting his state should be an early adopter to this new technology.
Either way, state by state, politicians from municipalities, like Mayor Saurez, to the Senate, like Cynthia Lummis, will continue to lead the way until everyone is eventually on board. It would be an amazing step towards mainstream adoption if Texas offered a state-run Bitcoin depository. You may think this is contradictory to the nature and ideals of Bitcoin, but adoption intermixed with governments is both inevitable and unavoidable.
What Is BitClout And Why Does It Matter?
A new concept designed to monetize clout has quickly caught the attention of just about every major investor, influencer, and lawmaker. Three facts immediately caught my attention. There was already an official PROFILE OF MYSELF on the platform that I didn't create, money can’t leave the system, and there were some serious backers behind the project including, Sequoia, Andreessen Horowitz, Social Capital, TQ Ventures, Coinbase Ventures, Winklevoss Capital, and a lot of other reputable VC firms.
Going to the site, the official one-pager reads “BitClout is a new type of social network that lets you speculate on people and posts with real money, and it’s built from the ground up as its own custom blockchain.” The idea is something that has probably crossed the minds of many people but has never been executed until now. Quickly after the release, BitClout was met with a lot of pushback, including a cease-and-desist letter from Anderson Kill P.C., a well-known crypto law firm.
Some people were upset that their likeness was being used for profit without their consent, but an even bigger issue is that there is currently no way to sell the tokens the platform offers. To buy my token or any influencers token (I am not recommending you do) you have to send Bitcoin to the platform, which is then converted to BitClout tokens, $BCTLT. The one-pager describes all the utility of the tokens but fails to mention that currently none of the tokens can be sold yet. Money can only enter the system - not exit.
On the positive side, I am a HUGE proponent of individuals being able to monetize their skills. Like in other areas of the world, third parties often benefit from the work of artists and personalities, when the creator themselves should ideally be in a position to reap all of the benefits of their efforts. Conceptually, I love it.
The idea is the first of its kind and the closest any social platform has come to monetizing fame and popularity, but that does not mean this is the final iteration. It is a HUGE issue that money can be put in but not taken out. I have not claimed the money tied to my account (which is literally free money), nor do I care whether the value goes up or down. I may eventually claim the profile to assure that nobody else gets their hands on it. The tokenomics are designed to scale to money coming into the network, but if the tokens can’t be sold and the money can't escape the system, the value inside in theory can only go up or disappear (aka the money is stolen). I linked the platform HERE if you want to take a look.
The World's Largest Margin Call
In yesterday's news update on YouTube, I discussed the massive block sale of stock facilitated by Goldman Sachs and other banks last week that were viewed as "unprecedented" and sent some of the world's most valuable stocks into free fall. The price action look like illiquid altcoins rather than major companies. Now we have some clarity.
It seems that Bill Hwang, a notorious market manipulator who was run out of the hedge fund world 10 years ago, had amassed a massive fortune using high leverage and derivatives to purchase stock without ever having to disclose because he was running it through a family office.
Well, he got margin called when it went against him, the cascade being triggered by a roughly 10% drop in ViacomCBS stock. Nobody knows yet how much he lost in a matter of days, but many conjecture that it is well over 100 billion dollars.
Let this be a lesson - even at the highest end, leverage is a dangerous tool and once it goes against you, the cascade of pain can reverberate through your entire portfolio in a matter of minutes.
The Wolf Of All Streets Podcast Ft. Richard Byworth
The last time Richard Byworth was on the podcast; Bitcoin was slowly pushing to $10,000. Now that it has exploded to 5x this figure, Byworth’s Diginex exchange has seen spectacular growth in every metric and yet, he still believes the leading digital asset is an opportunity not to be missed. His thesis suggests that governments, corporations, investment funds, and the FED will each play a unique role in driving Bitcoin’s price to a 6-figure cycle top.
In this episode, we discuss a range of topics including
Supply-side shock
CFOs convincing their board to buy Bitcoin
Peter Schiff capitulating
Ethereum scam wicks
Government seizures
Exchanges running out of Bitcoin
Apple’s secretive treasury
A 175K cycle top
Governments buying Bitcoin
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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.