The Wolf Den #242 - We Can Survive A Tweet
Bitcoin Thoughts And Analysis
DAILY CHART
Beautiful bounce from demand and a nice long wick. Yesterday's candle was a doji or spinning top, depending on your view, both of which show indecision. It can be a reversal candle depending on today's action, which thus far is decent. That said, we need to see a real increase in volume to make any recovery look more sustainable, which we are not seeing yet on lower time frames. For now, the daily looks fine, but I want to see how it closes.
4-HOUR CHART
Nice sweep of the range lows with a long wick and then second retest of the range lows with a long wick again. Encouraging. Then again, we still need to see volume kick in. It's decreasing still, as you can see. Assuming the range lows hold, we are looking to target the EQ around $55,000.
Losing the range lows as support would be problematic, and would indicate more downside.
Another day, another div. I drew it once again in advance and it came to fruition. This div is on every time frame up to the 6 hour, which is what we look for - building from the hourly and continuing up on higher time frames. That said, hidden bearish divergence is still in play, so we want to see candles closing above the black line around $50,900. I still think we are likely in the process of bottoming, but could see another push down to form more divs before the move up. This often happens. The bottom is a process, not a moment in time.
BlackRock Sees A Future In Bitcoin
Rick Rieder, CIO of BlackRock, in response to Elon’s Twitter fiasco regarding Bitcoin had the following to say, “Bitcoin is an interesting asset, it hasn’t reached full maturity yet, it hasn't reached the point of clear asset allocation like stock, bonds, etc… It has some hurdles to overcome and Musk was mentioning one of them. Bitcoin is durable, it will be part of the investment arena for years to come, but it still has challenges. We created a very small position to get our toes in the market, but these challenges are real, it's just not there yet as a normal stable asset.”
BlackRock has barely stuck their toes in the water, only publicly announcing they own $6.5m in futures contracts, but statements like the one above shows the firm is starting to understand the asset. The truth is, Bitcoin does not need to change to mature, the ideas and perceptions around it do. It has proven to be liquid enough for large purchases, survived catastrophe in the past, and is the strongest crypto network. The time to front-run institutions like BlackRock is dwindling and you can count on the fact that they will want more exposure when their perception of the asset matures.
MicroStrategy Is Buying Your Bitcoin
If you aren't an experienced trader, then instead of attempting to time a dip on your own, why not just follow the purchases of MicroStrategy? Michael Saylor is continuing to run his software company and publicly acquire as much Bitcoin as possible. As an extremely successful company, it’s hard to imagine any of MicroStrategy’s purchases are poorly timed or ill-informed. As long as you are patient, I am confident that taking the same trades as Saylor will pay off in the long run. If you need further proof that Michael Saylor believes in what he is doing, then check MicroStrategy’s stock price. Despite the stock continuing to plummet, accelerated by doubters of the company’s Bitcoin strategy, Michael Saylor is continuing to accumulate more. So, whether you decide to purchase alongside him or just hold like he is, realize this man is risking his company every day because of his belief in the future of this asset.
Dogecoin Is Coming To Coinbase
This was inevitable. We have seen coins both pump and dump on Coinbase listing day, so it's too hard to guess what side of the aisle Doge will fall on. Now that we know it’s coming, Coinbase has given traders the opportunity to buy the rumor and sell the news. That being said, Doge is such a unicorn that there really is no telling. Nonetheless, in the long run, Coinbase is the perfect newbie exchange paired with the perfect newbie asset - this does not change my mind that investing in the asset is still playing with fire. The asset is expected to arrive in the next 4 to 6 weeks.
Binance Is Under Investigation?
After one bad comment from Elon, every major news source jumped on the chance to pile on the FUD, driving down price and catching the coattails of bearish sentiment. Unfortunately for Binance, Bloomberg wrote an article with an overly click-baiting title, “Binance Faces Probe by U.S. Money-Laundering and Tax Sleuths” making it look like Binance is in hot water. The truth is, illicit funds traveled through Binance, so they are collaborating with government officials to assure that they are compliant. Any entity that’s approaching $100b volume days is going to be under tight scrutiny. Two days ago, I interviewed CZ Binance, the CEO, and had a blast. He is really genuine, a genius, and shared some really interesting insights regarding exchange activity - the truth might surprise you. Overall, I think Binance is a great company, and they aren't criminals like the media is making them out to be.
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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.