The Wolf Den #238 - Buy The Rumor, Sell The News
Bitcoin Thoughts And Analysis
Bitcoin remains boring. Watching it remains effectively pointless. It's a waste of time for now, which is amazing for altcoins.
DAILY CHART
I am looking for a daily close above $58,986 before being at all interested in Bitcoin. That was the swing high after the major drop, and price has struggled mightily to get back above it. Not trade for me below that line, unless you are looking to catch a knife on a drop, if it happens. For now, we have 3 consecutive wicks above, meaning there's a lot of selling interest and liquidity above that line.
4-HOUR CHART
We have slight but confirmed bearish divergence with RSI on the 4 hour. It is not overbought, but still counts, so another drop here would not be a surprise. I don't give much thought to divs like this that are in the middle of the RSI range and also on sideways price action, as they usually have a minimal effect even when confirmed. But I would not want to be long into a confirmed bear div either. More evidence that we should stay away from BTC right now. RSI did hit overbought recently, so we know it will eventually make it back to oversold.
Altcoin Charts
I continue to focus on "dinosaur coins," primarily large caps that were popular in the 2017 alt seasons. I know it's not sexy, but these are the coins that have been offering the easiest gains with the most liquidity, and there's no reason to stop doing it until it stops working. We saw the initial moves from ADA and XRP weeks ago, saw BNB pump, and now have seen ETH and LTC move like mad.
They have largely followed the same pattern. Break long standing descending resistance and then head up after a retest. TRX and EOS are both basically in the early phase now, so I am watching them to follow.
If it ain't broke, don't try to fix it.
EOS/BTC
EOS just broke descending resistance for the first time since early 2018. We saw what happened when the other coins did the same. If this follows the other large caps, then it is probably the best opportunity right now with the most upside. Technically, the safest entry is a retest of that blue line as support. Remember, this is a weekly chart, so give it plenty of room on the stop loss and expect it to take a while!
LTC/USD
I have been screaming from the mountaintop to anyone would would listen that Litecoin looked ready for a massive move.
Well...
Litecoin is officially in price discovery after making a new all time high. The weekly candle was absolutely massive, a Marubozu that closed above the previous all time high. A Marubozu is a candle with no wicks - it opens at the lows and closes at the highs of the session - in this case an ENTIRE WEEK. I cannot stress how bullish this candle is - Marubozu, through resistance, on nice volume. The clear entry now, if you can get it, is a retest of the previous all time high at $370.78.
Ethereum retested it's previous highs around $1419 in the same manner I am anticipating. But remember, Bitcoin did not make that retest - it just continued up. Also, this is a weekly chart, the retest could drop below and close above, like ETH did. If you are trading on this move, consider a very wide stop loss and smaller position size because of the high time frame and potential.
Legacy Markets
DXY (DOLLAR INDEX)
The dollar officially broke local support on the daily. You have seen my longer term charts a thousand times. Just know that this technically means price should be headed to lower targets after this brief consolidation. That should be good for metals, stocks, Bitcoin and basically everything else.
Ethereum’s 50K Strike Price
Deribit, the leading Bitcoin and Ethereum options platforms by volume, just released their strike price for the March 2022 Ethereum expiry... drumroll please…. $50K ETH. What this means is that for bullish traders looking to profit off this call, Ethereum will need to trade at 50K in March 2022. It will be interesting to see how many traders take the bait on the contract as time unfolds and the bull run continues. From current levels, Ethereum needs over a 12x on spot price. I predict the trade will slowly become more attractive to Ethereum bulls, perhaps giving a glance at just how bullish maximalists and the public really are.
Dogecoin Is Literally Going To The Moon
Elon Musk has committed to sending DOGE-1, a Doge-themed satellite into space, exclusively funded by Dogecoin. The satellite, designed by SpaceX, is supposed to prove that the cryptocurrency is “sophisticated enough to finance a commercial Moon mission in full,” but really is just a clever/fun publicity stunt. There was no mention of having the satellite run a Doge Node or Elon Musk accepting Dogecoin as a payment for his businesses other than this specific transaction between the builder and buyer of the satellite. This is simply an escalation of a joke that is beloved by the community and now the mainstream investor.
The Push For Satoshis Instead Of Bitcoin
Mike Novogratz, the CEO of Galaxy Digital, is urging all major exchanges to switch the Bitcoin unit of account to Satoshis. Switching to Satoshis may make more sense to newcomers, who are either confused about their 0.00000001 BTC balance or are intimidated by the high price of a coin. When Mike Novogratz tweeted about this, I noted that Mark Yusko made a good point - there are currently 2.1 quadrillion sats, a number high enough for everyone to be excited about owning a few thousand. It may be tricky for exchanges to make this shift, but I suspect Bitcoin’s rise will encourage more supporters for the transition. Cash App already did it, so it will be interesting to see if a major exchange is next.
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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.