The Wolf Den #245 - Keep Calm And Carry On
Bitcoin Thoughts And Analysis
For the first time that I can recall, oversold bull divs failed across the board on Bitcoin, especially on the 4 hour chart. This is a reminder that no indicator is perfect, even if it has been accurate more times than not. As I mentioned before, I have continued to buy the dip because I have conviction in long term price appreciation. I have not been trading, I have been investing. As Peter Brandt said on my interview with him for Trade Gods, buy a good asset then hope it drops 50% so you can buy some more. We have that opportunity.
MONTHLY CHART
I have shared this epic channel more times than I can count. Price just bounced right off of the EQ, which is the center line. Beautiful retest. It would be poetic for that to hold as support.
DAILY CHART
I added Fibonacci levels for the entire move from the March 2020 lows to the 65K top. We just had more than a 50% retracement of that move, pretty intense. That would definitely be "enough." We also now have a 54% drop from the top at 65K to about 30K, which is incredible in such a short period of time. All of that said, we are seeing serious demand and buying from the lows for now, so that "could" be the bottom." Price is back in the demand area between 37K and 39K that I have had drawn for ages.
There's very little to chart right now. We need to just be patient and see what arises in the coming days.
Crypto Can Be Frustrating, The Internet Was Too
At one point or another, you have probably found yourself banging your fists on a table, angry that there isn't a tech-support phone number you can call for a quick fix on your favorite crypto platform. At this point, it’s really rare to see a crypto company offer a direct line that you can call to assist you in addressing an error message, retrieving lost funds, or speeding up your verification. This can be a huge turn off for newcomers who have always relied on their bank or legacy exchange answering their calls immediately, but this is just the way it will have to be for a while.
I interviewed Ray Youssef from Paxful many months ago and he is the perfect example of why this is the case. When he was first starting Paxful, the company received so many calls, he had to list his personal cell phone number on the site to assist in helping customers. In our podcast interview, he said that the majority of his calls were mothers needing assistance in setting up a Bitcoin wallet on their mobile phones. Granted his business is international and geared towards the developing world, his story is probably one that carries true across the industry. Simply put, there are so many people that would use these lines that no army of competent employees would make a dent in the demand.
If you are old enough, think back to when the internet first came out. Your best chance in receiving help wasn’t a phone number or customer support line, it was your co-workers, neighbors, or if you were lucky a physical visit to a tech shop. Diagnosing problems then was a lot harder than navigating a Bitcoin wallet or exchange today. You had to actually work with the code if you wanted to fix something and if you deleted the “startup file,” well, your PC wouldn't start up anymore. Nobody prefers sending in a support ticket, but this does not detract from the legitimacy of the space. It is a sign we are early and flooded with people who are eager to learn and participate.
BlockFi Proves: Not Your Keys, Not Your Coins
Interest-bearing platforms have their advantages, but the moment you give up your keys is the moment you no longer truly own your crypto. BlockFi royally screwed up yesterday and accidentally sent Bitcoin as a reward instead of stablecoins. The algorithm must have believed it was sending dollars while sending Bitcoin, resulting in some accounts seeing deposits of over 700 BTC to their wallets.
BlockFi immediately recognized the mistake and began working to correct the issue. Legal threats were issued, withdrawals were locked for some users, and incentives were put out to return the Bitcoin. BlockFi claims only about 100 users mistakenly received Bitcoin, but the risk was well into the millions. For context, 700 Bitcoin at the time of the botched promo was worth about $28M dollars. Always be cautious when you give up control of your keys, it would be terrible to be the person caught up in a nightmare story.
To be clear, I use these platforms, but most of my Bitcoin is in cold storage.
Major Exchanges Hate Volatility
Major exchanges are struggling to handle the volatility
Of course, when it feels like life can't get any worse in crypto, just about every major exchange fails or temporarily experiences partially degraded services. Exchanges have quickly come back online, but there are a few takeaways from the major outage. First, as long as infrastructure continues to systemically fail, we know we are still early. Eventually, this will subside and crypto will behave like the legacy system, but until then, take this as a sign the space still has a lot of maturing left to do. The second point assumes this trend will continue through the bull run. Meaning you will probably never perfectly time a volatile top or bottom unless your bids are set, and the platform picks them up while offline. As a customer of major exchanges, you and I both hate it when they go offline, but they hate it too. Nobody wins in times like these, it's all about holding on tight to the boat and reminding yourself why you are here in the first place. This too shall pass.
Tesla Has Diamond Hands
Tesla did not sell their Bitcoin, according to a tweet today from Elon Musk. There was quite a bit of conjecture, from myself as well, that Tesla potentially sold today to avoid holding below their entry.
Good to see that Tesla has diamond hands.
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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.