The Wolf Den #233 - Out With The Old And In With The New
Bitcoin Thoughts And Analysis
MONTHLY CHART
The monthly candle closed on Friday, a bit indecisive with a doji. Monthly candle I find almost useless, because they take so long to play out, so I prefer to just look at the general trend - which is clearly up. I have been posting this channel since it formed with the touch at the bottom and updated a few times since it flipped the EQ (equilibrium, the center dashed line) to support. This is how you easily can visualize 6 figure Bitcoin targets. Simply hitting the top of the channel, which is technically what should happen when you get into the top half, could see price hitting 200K or higher.
WEEKLY CHART
There have been quite a few "bad" weekly candles on the chart in the past year. Each has been followed by bullish movement up to new highs. This is a reminder that the larger the time frame, the harder it is to use candle patterns and also that a "bad" candle requires confirmation.
This time, we have a bullish engulfing candle after the drop, indicating likely continuation to the upside.
4-HOUR CHART
Beautiful. Break of blue descending resistance, inverse head and shoulders with a retest of the black neck line to the dollar, flip of the 200 MA and break through 50% and 61.8%. Looking really good for now! I just want to see more volume. Either way, there is a lot of confirmation that the previous dip is over. If it drops again, it's a different move in my opinion.
Altcoin Charts
BITCOIN DOMINANCE
For those who like to chart Bitcoin Dominance, it closed below 50% on the weekly for the first time in almost 3 years (July 2018). Ethereum is clearly driving this move as it dominates Bitcoin, but this is starting to look like the Bitcoin Dominance moves of prior alt seasons. As you know, I believe it has been a sort of alt season for ages, just depending on which coins you are in - DeFi, NFT, "Sam Coins" etc. This excitement and action should continue.
BAL/BTC
There is no trade for me here yet, but it looks like it could be setting up for a nice move. The red supply zone has been tapped a number of times, usually signaling orders being removed and resistance weakening. This is happening in conjunction with higher lows on price, effectively an ascending triangle. The two potential entries would be a drop to support or a break and retest of the red zone. This is one to keep an eye on, but I would personally not do anything yet as it's at resistance. This may never play out, which is totally fine. There's always another trade.
ETHEREUM
Ethereum has been quietly dominating Bitcoin for weeks, slowly going parabolic on the pair. If you have been following along, then you are likely already in. Just to give some targets for the recent moves (although we have long passed the best entries), blue represents the target of the break of the descending black line, and red shows the target of the confirmed inverse head and shoulders. For now, there's no reason to believe that Ethereum will stop moving, as long as you are patient and zoom out.
Ethereum is well on its way to the $3,600 target that I have been mentioning since price formed the bull pennant. This is based on the flagpole in grey. The more conservative flag pole (red) hit its target already.
I have added a few support levels where I would be looking to buy dips, if they come. Those chances have likely passed, since those levels have already been tested as support, but good to throw in some buy orders just in case, if you believe that ETH will continue this bull run.
On Balance Volume (OBV)
A few members have asked me to share more information about indicators. I used to use OBV often, but really honed in on RSI and divergences as the core of my personal indicator strategy, as I primarily just use price action. That said, OBV is a useful and popular tool. Here is a basic lesson I found on how it can be used. It can also be used to find divergences, just like RSI.
Phishers Want Your Seed Phrase
An unofficial Google Doc has been going around targeting MetaMask users' seed phrases under the guise of customer support.
1. Never give up your seed phrase
2. Always seek customer support from within an app, never from outside
3. Always go through FAQ in house before considering anything outside
4. Always double check emails you receive from exchanges, as one letter off can be the difference between a fake message and something authentic
5. The only time you should consider using your recovery phrase is if your funds are lost or in jeopardy. Other than that scenario, lock them up securely.
Bitcoin Will Likely Undergo A Rare Upgrade
Bitcoin users may, before long, be able to benefit from a trick called “Taproot.”
Over the past year, Ethereum has stolen the show, receiving widespread praise and support for its developing narrative and imminent upgrades. Behind the scenes, Bitcoin has commenced a rare upgrade. Coined "Taproot," the proposal offers flexibility to Bitcoin’s utility through smart contracts and privacy. Support for the upgrade began almost unanimously amongst the core developers and has since received positive feedback from miners around the world. The upgrade will do a better job of hiding transaction details that should remain private and also offer new ways for complex transactions to take place on the blockchain.
For the majority of Bitcoin holders, nothing will appear different in the way Bitcoin is currently used. For the upgrade to happen, 90% of miners have to signal approval, which is already expected to be the case. It is anticipated that if all goes to plan, Taproot would go live prior to the holidays, which is great considering our current position in the bull market. As the bull run progresses, Taproot, ETH 2.0, and other major protocol upgrades will feel the pressure to deliver as much as possible before the winter comes. Putting out positive upgrades is a major boost for fundamentals and ultimately price.
ETH Hits $3,000, Vitalik Buterin Becomes A Billionaire
After approaching the psychological level of $3000 for days, Ethereum finally smashed through, taking Vitalik's net worth with it.
"At the time of writing, the address holds around 333,500 Ether, now worth $1.029 billion according to on-chain data from Etherscan, as ETH more than quadrupled in value from around $700 in the beginning of 2021."
Congrats to Vitalik and the entire Ethereum community. I don't think this "helluva party" is stopping anytime soon either.
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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.