The Wolf Den #237 - Start From The Beginning
Bitcoin Thoughts And Analysis
There is absolutely nothing to see on the Bitcoin chart. It's chopping sideways, smashing traders with quick moves on both sides who are over leveraged. As I mentioned yesterday, at this point we need to see it trading above 59K or so for there to be anything meaningful worth trading.
Here is a chart for the day.
Sorry to make a joke, but this price action should not be traded. I am staying away for now. Everything in that circle is a disaster for traders.
Altcoin Charts
Most of the setups I have shared are still valid as alts cool off a bit today. OMG just popped, which I shared on both pairs the other day. All of the macro large cap ideas still look great, nothing has changed. 1Inch had a perfect retest for the entry we were looking for a well.
LINK/BTC
Here are a few ideas for trading LINK, if you are looking for an entry. The red path is the safest, waiting for confirmation of a resistance to support flip. Blue is the most likely, with price hovering above that support. Light blue is the greedy path if price continues to drop.
UTK/USDT
UTrust is one of my favorite companies and a long term hold. As you can see, it made a new all time high the other day on the USDT pair and has entered price discovery. And look at the volume of the past week! I am already in, but if I was not I would be looking to buy dips, and the previous all time high is a good place to try to catch it if it falls a bit more.
Legacy Markets
COIN (COINBASE)
This is hard to chart, because there is limited history and obviously price action is driven largely by hype and fundamentals. That said, we now have a perfect descending channel with a nice potential bounce from the bottom. I have been buying Coinbase since $325 or so, most recently at $252. This is not a trade for me, but a bet on the company long term as an investment. But I will continue to scale in.
DJI (DOW JONES)
"Stocks only go up." Seems true. The entire market seems ready for another massive leg up. The Dow has made yet another all time high today and appears to be pushing out of a bull pennant. Even with a conservative flagpole measurement (you could make an argument for a longer flagpole from further below), the target is easily another 10% move.
DXY (DOLLAR INDEX)
I will spare you the bearish monthly chart that I have shared countless times. The daily chart shows the dollar at ascending support, but hanging its toes over the edge of the cliff. I doubt this hold, personally, and think the dollar is ready for another leg down as the printer goes brrrrr.
Should be good for other assets.
10 Powerful Lessons From Warren Buffett
By Sahil Bloom:
Warren Buffett is a treasure trove of wisdom.
But contrary to what you have been told, most of it has nothing to do with investing.
10 powerful lessons for life from the Oracle of Omaha:
#1 - Wait For A Juicy Pitch
“You don't have to swing at everything - you can wait for your pitch."
Life doesn’t reward you for the number of swings you take.
Focus on identifying the juiciest pitch.
When it comes, swing hard and don’t miss it.
#2 - Just Stop Digging
“The most important thing to do if you find yourself in a hole is to stop digging."
When things aren’t working, change course and try something different.
Be nimble. Be agile.
When you find yourself at the bottom of a hole, stop digging and climb out of it.
#3 - Exploit Disconnects
“Price is what you pay. Value is what you get.”
Seek out situations where there is a clear disconnect between price and value.
This applies to investing, but it’s more broadly a mental model for life.
Identify disconnects. Exploit them to your advantage.
#4 - Be Contrarian
“Be fearful when others are greedy and greedy when others are fearful.”
Following the crowd is easy, but it can be a trap.
Learn to think independently. Come to your own decisions. Develop your own mental models.
Your unique perspectives are your superpower.
#5 - Optimize Value Capture
“Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble."
Create structures that enable you to capture more of the value you create.
The most successful people have simply optimized their value capture mechanisms.
#6 - Make Time Your Friend
“Time is the friend of the wonderful business, the enemy of the mediocre.”
Don’t be in a rush.
Set up your life to compound value over the long-term.
Play long-term games with long-term people.
Make time work for - not against - you.
#7 - Protect Your Circle of Competence
“Risk comes from not knowing what you're doing.”
Be ruthlessly honest about what you know (your circle of competence) and what you don’t.
Focus on playing games within your circle - otherwise, you’re just gambling.
#8 - Never Get Caught Naked
“It's only when the tide goes out that you discover who's been swimming naked.”
Find a balance between pushing yourself for growth and being completely out of your depth.
Never put yourself in a high-stakes position to get caught swimming naked.
#9 - Reputation Matters
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.”
In every interaction - big or small - always act in accordance with strong principles and values.
Your character is your fate.
#10 - Invest In Yourself
“The most important investment you can make is in yourself."
There is no better investment than an investment in yourself.
Find time to read, to think, to learn.
Surround yourself with amazing people who push you to become better.
Invest in you.
These are 10 powerful lessons for life from Warren Buffett, but there are so many more.
What are your favorite lessons from the Oracle of Omaha?
Will Bitcoin Always Remain Fungible?
In the crypto world, maintaining fungibility is important because it ensures that tokens hold equal value when exchanged. The mining company Marathon Digital Holdings announced that they successfully mined their first “clean block.” What this means is that the process to mine the Bitcoin was 100% compliant with U.S. AML laws and other national asset control standards. While clean Bitcoin is something we should root for, it raises the important question of whether some Bitcoins will be worth more than others.
Cleaner Bitcoin is slowly becoming a recurring talking point. There is a possibility that “cleaner” Bitcoin could sell at a premium over “tainted” Bitcoin, meaning they are no longer fungible. Depending on the level of demand for clean Bitcoin and the course of action companies take to acquire them, clean Bitcoin may trade at a slight premium without changing the underlying price. If demand is high, there is a possibility that Bitcoin will be traded based on its mining history and behave like an asset slightly closer to an NFT. This is worth tracking.
DeFi Is Growing, But Still Expensive
Uniswap V3 just launched and broke records for its 24 hr volume, but lingering complaints remain - unbearable fees. Users were hoping the V3 iteration would bring down gas fees, but were instead met with higher fees than before. It’s currently being reported that “single hop transactions are about 28% more expensive and larger transactions are slightly more.”
There are alternatives to Uniswap (I use Matcha), but Uniswap isn't the real problem, it's Ethereum. Although frustrating, an upgraded Uniswap is another reason to be bullish on Ethereum assuming it solves its scaling problem.
Square Boasts Profit From Bitcoin Holding
Square was one of the first major companies to hold Bitcoin on their balance sheet and they are reaping the rewards. Square bought in below $15k, hasn't sold, and has since enjoyed a 1,000% revenue boost on their crypto services. If this isn't a wake-up call to every financial giant competing with Square, then I don't know what will be. Also worth noting is that Square nearly doubled down on their initial position with a second purchase in February, which has since seen a $20m paper loss due to the recent dip. None of the coins have been sold.
Bitcoin has become an integral part of Square’s strategy via Cash App, the asset on their balance sheet, and Jack Dorsey’s commitment to furthering the currency’s global adoption. I will leave you with this statement from Dorsey, “our focus, first and foremost, is on enabling ... Bitcoin to be the native currency. It removes a bunch of friction for our business. And we believe fully that it creates more opportunities for economic empowerment around the world.”
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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.