The Wolf Den #247 - Staying Calm Is Key
Bitcoin Thoughts And Analysis
WEEKLY CHART
The weekly candle looks good for the moment, with a long wick down and relatively small body. This would be a bullish hammer, but we have two more days and a lot can happen. I will be watching.
DAILY CHART
Bitcoin is finding resistance just under 42K, which is predictable. This was the market high after the move up from 20K and took Tesla buying Bitcoin to break in the first place. Perhaps it's poetic justice that we are back here, erasing all of the effect, both good and bad, that Musk had on the market.
Failure to trade above this level will likely send price back down to either test the low or make a higher low, which would be fine. Key levels are marked.
If we do not break 42K and do drop, I will be watching for a bullish divergence with RSI on the daily, coming out of oversold. This would require a daily close below $36,750 or so, not a drop all of the back down to 30K, since the line chart is based on closes and not wicks. This would be an epic bottom signal.
4-HOUR CHART
The battle for 4 hour div supremacy continues, with yet another hidden bear div to cancel our bullish divergence. Tons of indecision.
BOTTOM LINE - 42K is the key level for now. A break above and we can start thinking about a real reversal. If we drop, we will be looking for a higher low and potential bullish divergence on the daily chart.
What Is Blockchain?
The third installment of my beginner series on crypto. As I mentioned before, the intention of this series is to take beginners through the very basic, putting them on the path to becoming experts in crypto and blockchain. Enjoy!
Intellectual Curiosity Is A Competitive Advantage
By Sahil Bloom:
Intellectual curiosity is a competitive advantage. But contrary to what you’ve been told, it has nothing to do with intelligence. 10 ways to start developing your intellectual curiosity today:
#1 Scrub Your Windows: “Your assumptions are your windows on the world. Scrub them off every once in a while, or the light won't come in.” - Isaac Asimov Curiosity is a light that can only enter when your mental windows are clean. Scrub them off now and then. Let the light in.
#2 Embrace “I Don’t Know”: “The only true wisdom is in knowing you know nothing.” - Socrates Avoid false confidence (and the people that display it!). Embracing what you do not know is a superpower. Recognize your gaps and blind spots. Slowly, methodically fill them in.
#3 Go Down Rabbit Holes: When you find a spark of curiosity, dive in and don’t look back. You cannot control when they come, so you must embrace them when they do. The rabbit hole is the amusement park of the intellectually curious mind. Enjoy it!
#4 Ask “Dumb” Questions: When we are young, we always ask “Why?” But overtime, we develop a fear of asking the “dumb” question that may draw the ire of our peers. That fear stifles our intellectual curiosity. Fight it back. Face it. When in doubt, ask.
#5 Build Curiosity Circles: Curiosity is communal. Find a group of friends who are motivated by learning and growth. Share ideas, learnings, and insights with each other. You’ll build bonds and have a constant source of stimulation for your intellectual curiosity.
#6 Make Learning the Goal: Learning with a specific end goal in mind often becomes a chore - it is a fast track to stifled curiosity. Focus on the learning itself - not other outcomes. Take pride in learning something new every single day. “Learn as if you were to live forever.”
#7 Open Up to the World: The diversity of human experience in our world is one of the greatest gifts to the intellectually curious mind. When you meet someone new, take genuine interest in their life and experiences. The world opens up to you, when you open up to the world.
#8 Focus on Your Passions: Forced learning is for school. It doesn’t work in practice. It stifles curiosity. Find what you truly enjoy learning about. It doesn’t matter what it is. It doesn’t have to be “intellectual” or impressive. Remember: You are learning for you!
#9 Read Flexibly Books: are a life changing investment that you can make for under $100. But to take advantage, you must read flexibly. Read what you love. Read what draws you in. When it stops doing so, put it down. Forced reading is the antidote to curiosity.
#10 The Curiosity Chronicle: And last - but certainly not least - sign up for this newsletter... A weekly short-form newsletter with five pieces of content curated to spark your intellectual curiosity.
The Senate Banking Committee Is Questioning Crypto Banks
Earlier this year, the OCC gave the green light to crypto companies to act as banks, but the Senate Banking Committee now has doubts. These conditional national trust charters given by the OCC allowed crypto firms to legally take on some of the duties of traditional banks, which is now under question from a different regulatory agency. Due to the recent volatility spike and Elon’s comments, the Senate asked the OCC to “reassess” the charters given to three cryptocurrency firms in an official letter - Anchorage, Paxos, and Protego.
The reasoning offered by the Senate for the reassessment is atrocious, as they clearly don’t understand the volatile nature of the crypto market. Elon could tweet about any stock, bond, or equity the size of Bitcoin and cause a massive drop or pump, so crypto isn’t the problem. A nascent market isn't an excuse to prevent a company from acting responsibly, it’s a reason to outline and encourage responsible behavior. The letter is just another example of the government's lack of understanding of the market. The Senate is interfering with another entity's' regulation and oversight - the demands won't be substantiated in the long run.
The IRS Wants You To Pay Taxes… Obviously
The new IRS tax proposal that is making rounds in the news is actually nothing new. As per current law, the IRS requires “a person to report cash transactions of more than $10,000 by filing IRS Form 8300 PDF, Report of Cash Payments Over $10,000 Received in a Trade or Business.” The IRS’s announcement to extend this requirement to cryptocurrency shouldn't be a surprise, as a compliant taxpayer should have already been aware of this law and acting accordingly.
One more attempt to spin a nothing burger into a negative story.
The FED Is Researching CBDCs
The FED has made a major announcement in regard to their exploration of CBDCs. Here is a direct quote from the official press release, “Powell announced that the Federal Reserve plans to publish this summer a discussion paper that will explore the implications of fast-evolving technology for digital payments, with a particular focus on the possibility of issuing a U.S. central bank digital currency. The paper will complement Federal Reserve System research that is already underway.”
The research mentioned above has been going on for quite some time and I expect the findings to be bullish for the market. As much as the crypto community knocks on the FED, their participation in crypto is inevitable and will be far-reaching. Ultimately, we want them to act in our favor. Jerome Powell, the chairman of the FED, has given positive attention to the advent of the blockchain, distributed ledger technology, and stable coins - a step in the right direction. Whether we like the CBDC issued by the government or not, I do believe it will add a sense of maturity, clarity, and likely bullishness for the crypto market as a whole.
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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.