The Wolf Den #243 - Sick Of Talking About Elon Musk Yet?
Bitcoin Thoughts And Analysis
The correction has continued through the weekend, not what I was hoping/looking for. We all know that hope is not a trading strategy. I have bought Bitcoin twice in the past few days, around 48K and around 46K. I intend to continue buying the correction, because I have a long time horizon and believe we will eventually trade much higher, even if it takes a while. I am not trading this with leverage, and would have honestly stopped out on a few attempts to long bull divs too early. Those divs are still developing, so my general outlook has not changed. I am feeling comfortable with my buys on spot as an investor, no stress at all.
WEEKLY CHART
I have pointed out a few times that "bad" weekly candles rarely end up being top signals and that we usually see continued price movement to the upside. We have another big weekly candle that could signal a larger correction - but look at the similar candles shown by the arrows on the run.
Further, we had almost the exact same weekly candle in February, top to bottom. That was followed by continuation to the upside.
DAILY CHART
I happened to click on my chart template with Stochastic RSI and noticed that it is completely bottomed out and potentially crossing bullish (blue line over grey line). This looks similar to Stochastic, a slightly different indicator. This can stay oversold like this for a while, but it would be a surprise to not see at least a nice relief bounce when this heads back up. Hard to predict if that will be now or at a lower price.
You can also see that price has now fully penetrated the red demand zone and bounced almost exactly off of a key level around 42K, which was the previous all time high before the "Tesla Pump." This is a level that people have been watching for months. I would like to see price hold both of these, obviously, as they are key support levels. The blue zone below in the high 30Ks is next if those break.
There is potential bullish divergence with RSI on the daily chart. That said, RSI STILL has not made it to oversold, which you would expect after it trading overbought. So would take a bit more downside for that to happen and would invalidate a divergence. I think the TA here is muddled, but will be interesting if it can confirm a div with a clear elbow up on RSI.
12-HOUR CHART
The 12-hour chart did hit oversold and has potential bullish divergence forming. Again, we need an elbow up on RSI, and it would be a small divergence.
4-HOUR CHART
We have continued bullish divergence on the 6 and 4 hour charts. I drew the big one instead of focusing on all of the building small ones in between. Price has dipped into oversold three times here. While anything is possible, it would be a departure from history for this not to bounce or even bottom relatively soon.
The issue, obviously, has been trading these divs with leverage so far would have gone badly. I always mention that bottoming is a process, but price has pushed pretty hard since the first div was confirmed, making this difficult to trade this time.
Bitcoin clearly lost the range that it was trading at between the all time high and around $47K. That's the most bearish aspect of all of this. We have a real spike in volume on the exit of the range and tons of volume since, both on the pushes down and the bounces. I am not confident at all until price is back in the range.
After the major drop, price has now formed a perfect descending channel. This should statistically take price back up to around 51K on a relief bounce, but it needs to break out of the top before it matters.
Altcoin Charts
There is no reason to be looking for altcoin trades at the moment, unless you are looking at this as an opportunity to buy dips on the USD pairs as an investor. BTC pairs have largely held up pretty well, as evidenced by the continued drop in BTC Dominance. Almost all of the old setups I have scanned through are still relevant, nothing has really changed on BTC pairs. There is one setup that I am watching, which has not triggered so I feel it is safe to share.
AVAX/USDT
AVAX appears to be in a large bull flag or descending wedge, since the bottom of this flag was technically never confirmed. Either way. It looks like significant bullish consolidation above the 50 MA and after a major move up. This is a logarithmic chart, which is why the red target looks so much smaller than the flagpole - it's based on the percentage move and not on the number.
I would not be looking to trade this unless it breaks the top of the flag with real volume. Otherwise, this is just an idea and the market is very shaky.
Banking Consumes Twice As Much Energy As Bitcoin
The banking system uses twice as much energy as Bitcoin. Gold's energy usage is almost the same as that of the banking system.
While this seems like an "I told you so" moment for Bitcoiners, we all know that both the gold and banking systems are much larger than Bitcoin - certainly more than a multiple of 2. Energy consumption is a real issue for Bitcoin, but one that is largely being solved already by the mining industry with renewables and the usage of "wasted" energy. It is also difficult to ascertain the real environmental impact of banking.
“The banking industry does not directly report electricity consumption data,” the report says, adding that the retail and commercial banking system requires multiple settlement layers, while Bitcoin offers final settlement. Given Galaxy’s estimations of power usage by banking data centers, bank branches, ATMs, and card network’s data centers, the total annual energy consumption of the banking system is estimated to be 263.72 TWh globally.
Biggest Bitcoin Correction Since March, 2020
Peter Brandt twisted the knife into the side of Bitcoiners with his sarcastic tweet about institutional support. On numerous occasions, he has warned that we would still see significant corrections, regardless of the narrative. As shown above, as of yesterday, this was a 32.5% correction from the top, the largest in this bull run. As of a few hours ago, that number is closer to 35%, with a drop to $42,180 or so.
All of that said, look at the chart for 2015-2017. 35% is still a below average correction for Bitcoin during a bull market. While scary, what is happening right now is statistically normal.
Bitcoin And Ethereum Usage Fees Drop Dramatically
No surprises here, but still worth noting. "Transaction fees on Bitcoin and Ethereum have fallen by 81% and 71% respectively over the last few weeks, as the broader cryptocurrency market continues to descend from its recent all-time high."
MILC - Tokenizing The Media Industry
Welt der Wunder TV is an established brand that has operated for decades in Germany, which is the second largest TV market in the world. They broadcast and produce TV and online content that is viewed by 15 million viewers a month. The company was valued by Ernst & Young at 48M Euros last year. So what is their new token, MILC?
From their website...
Content creators, buyers, and distributors still operate in offline regional environments making discovery, networking, negotiating deals, and transacting commercials slow and inefficient ordeals that unnecessarily raise costs 30-50%, if not more.
The MILC Project will solve four fundamentally important challenges of the global media industry: Global availability of all Video Content, Discovery process for Buyers, Complex licensing for the entire industry, and Early feedback from its audience.
And for the first time, MILC will build a bridge between the audience and the content creators, buyers, and distributors. This connection will allow the audience to directly impact and receive benefits from the creation & distribution of quality new content.
You can read more on their website above. IDO details are on CMC below.
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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.