The Wolf Den #224 - Zoom Out
Bitcoin Thoughts And Analysis
DAILY CHART
Bitcoin still looks indecisive after the sizable drop from 2 days ago. As you can see, yesterday's candle was a spinning top, with a small body and nearly equal wick above and below. From investopedia below - "Since buyers and sellers both pushed the price, but couldn't maintain it, the pattern shows indecision and that more sideways movement could follow."
Not very helpful, right? A spinning top gives very little conclusive information and is hard to trade, even after seeing what follows. More than anything, it's a sign that the dump did not see immediate follow through, so can be viewed through that lens as potentially a sign of diminishing bull strength. Today's candle is promising thus far, but it is far too early to judge.
Bitcoin bounced perfectly from a fresh demand zone two days ago. The nature of the drop was a bit scary, but that area being tested as support is not. Further, we continue to have intact bullish market structure, with higher highs and lows. This higher low would only be confirmed by a break of the recent all time high, but for now there's no reason to panic from a structural perspective.
Too early to judge today's candle, but for now the last 3 days all have long wicks down, showing strong buying demand in this area.
Retracements are common for Bitcoin, and for now, this one looks like those before. That could change, but we will deal with that if it does.
4-HOUR CHART
Bitcoin could be settling into a range from the recent highs to the bottom of the dip (blue). This makes sense because price was ultimately rejected right at the EQ (the center dashed line). At this point, you can attempt to trade within the range, but swing traders would look for a break of either side to go long or short. We will have to see more price action to determine whether this range is significant.
There is a smaller range after the drop in red. Price is currently bouncing above the middle. It is hard to discern a clear pattern after the drop - some could draw an ugly bear flag, an ascending triangle etc. I do not believe there is enough information or clarity for now to draw anything other than this range.
Crypto On Venmo
PayPal and Venmo users will now be able to buy, sell and hold crypto on Venmo. Investors will be able to purchase as little as $1 at a time.
While those of us who are passionate about crypto would likely never use PayPal or Venmo because you are unable to send your Bitcoin off of the platform, this is amazing for mainstream adoption. The average person just wants to buy Bitcoin on a platform they are comfortable with. This is huge.
Doge Day
After embracing Bitcoin in 2014, Newegg has also started accepting Dogecoin
The massive online electronics retailer Newegg is now accepting Dogecoin in honor of Doge Day which is today, 4-20-2021. Here is an official statement from Newegg, “the excitement and momentum around cryptocurrency are undeniable, and the recent surge in Dogecoin value underscores the need to make it easier for customers to make purchases with this popular cryptocurrency.” Newegg has been a trendsetter in crypto since 2014 when they first began to accept Bitcoin as a payment. Regardless of your thoughts on Doge, this certainly won't be the last major company to accept it as a payment option.
Snickers and Milky Way also jumped in on the hype by congratulating Doge for its recent price achievement. Both companies are owned by Mars Inc., so it's not a coincidence that both are making a similar PR move. Signs like these often signal a top, but to be honest, nobody expected Doge to make it this far. Everyone is now saying that $1 is “programmed” which could certainly happen at some point, but is currently leaving me more inclined to think a pullback is overdue. It's nearly impossible to discern when that will happen when a coin goes full FOMO.
Putting Bitcoin Dips In Perspective
It's been a wild few days for bitcoin. Ari Wald of Oppenheimer breaks down the latest moves.
Ari Wald from the investment bank Oppenheimer did a really good job of putting the recent Bitcoin dip in perspective. Here is what he said:
“In August, bitcoin suffered a 20% drawdown, a 17% drawdown in November, 31% in January, 26% in February, 18% March, and now more recently down 16% about peak to trough. It must have been a tough nine months for bitcoin investors, right? Nope! ... Through that period from the August peak into the recent low, bitcoin is up 315%.”
Going back to January 1st of this year, Bitcoin was just above $29,000, which was only 3 months and 20 days ago - we are now almost double that amount yet for some reason everyone has turned bearish. Looking back to this time last year, Bitcoin was at $6,900, a 780% increase to today. All you need to do is zoom out for any time frame beyond a week and you will probably only see a positive price trend. Don't let the market shake you out over something as common as a dip which happens almost every month.
The Truth Behind The Coinbase Listing
I expanded on my thoughts from the newsletter intro yesterday in this short video. Worth watching if you are interested in what really happened with Coinbase and their executives selling shares.
Binance Smart Chain Station
Recently, there has been a massive increase in exchange volumes, record signups, and increasing popularity around exchanges and their tokens like BNB, which was just thrust into the #3 position by market cap. With this growth in mind, I wanted to share some details on BSC Station which is “building a full-stack DEFI with NFT auction on Binance Smart Chain.”
Powered by Binance Smart Chain, BSCS will become an economic infrastructure for DeFi and NFTs. BSCS is both a Dex and a project starter; it is the incubator for the development of new projects.
Here is a statement from BSC Station Founder Scofield:
“We at BSC Station aim to provide better efficiency, scalability, and cheaper transactions to the DeFi and NFT ecosystems. BSC Station will provide a strong bridge between both industries and ensure they can both become more appealing to mainstream users. Furthermore, we prioritize offering a straightforward user interface to optimize the user experience, as that is the key to succeeding in these competitive segments.”
If you want to learn more about how Binance Smart Chain is interacting with DeFi, read more from the link provided.
The Wolf Of All Streets Podcast Ft. David Hoffman
Available on YouTube at 10 AM EST - https://www.youtube.com/scottmelker
Those who don’t understand Ethereum believe it was simply created, however, when you fully understand it, you will realize the asset is simply a portal to a new future that is being discovered. Bankless co-founder David Hoffman believes that Ethereum is lifting the archaic veil from the legacy system, replacing the good, bad, and ugly on a daily basis. Hoffman explains that in order for Ethereum to establish itself as a financial revolution, the necessary major upgrades as we transition to 2.0 will inevitably continue to have growing pains. Achieving this milestone, although not a simple task, is critical for the better of global finance.
Follow David Hoffman: https://twitter.com/TrustlessState
In this episode, we discuss a range of topics including:
The controversial EIP-1559
The power of Ethereum miners
ETH 2.0 timeline
The minimal viable merge
“Ethereum killers”
Monetary Maximalism
Synthetic Ethereum
The shipping container metaphor
Ethereum splitting in two
Berlin and London hardfork
The NFT revolution
Podcast sponsors:
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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.