The Wolf Den #249 - Musk + Saylor + Energy Consumption
Bitcoin Thoughts And Analysis
You can see that price has been rejected from the local resistance that I added yesterday. This is the first level that price needs to get above, $38,889. After that, we have lower time frame resistance but really need to get above the blue line around 42K. That would be a much better sign of a real reversal and not just a reactionary bounce.
We have potential hidden bearish divergence, which would negate the bullish divergence that we waited so long to see. We want Bitcoin to close the day higher, without the definitive "elbow down" on RSI. I will be watching the daily close for confirmation. This does not mean price can't go up, it just means the bull div is finished.
4-HOUR CHART
I drew this local resistance yesterday on the livestream. The blue area is "supply," meaning there are likely left over sellers in that area that missed their chance before price dropped. This is effectively the same as resistance, and you can see that price was rejected exactly in that spot. Watching for a retest of that descending black line as support again, although at this point we want to be above the blue zone.
Legacy Markets
DXY (DOLLAR INDEX)
This still look ready to go cliff diving. When you zoom out, the dollar appears to have only begun it's decent back to the lows of this channel. 88.253 is the next support, which the dollar has been stubbornly hovering above. I am waiting to see what happens when that eventually tests.
Why does any of this matter? Most assets have an inverse correlation to the dollar. Dollar down, metals, stocks, and sometimes even Bitcoin, up.
RSI Divergences - The Basics
I have shared this piece a number of times. It is a brief lesson that I wrote up on trading RSI divergences that is applicable to almost any indicator of your choice. I have been discussing divergences a lot lately, which are a core part of my analysis. I thought it was worthy of sharing once again.
Bitcoin's Largest Capitulation Event To Date
"The magnitude of realised losses on-chain this week has, eclipsed all previous capitulation events, including March 2020, Nov 2018 and the sell-off that ended the last bull market in Jan-Feb 2018."
Insane. The drop to 30K caused the largest amount of realized BTC losses in history. Even with that said, 76% of Bitcoin addresses are still in profit, which is long term bullish. Those in profit are less likely to sell at these prices.
Usually capitulation at this level is a bottom signal - let's hope it holds true again this time.
Vitalik Buterin Releases An Official Statement On Scaling
After Elon Musk’s controversial Doge tweet outlining a grand plan to scale the asset, Vitalik responded with a thorough paper outlining why Elon’s intentions aren't feasible nor desirable. His response is unique because it clearly states why decentralization, block size, and node numbers matter. If you are an enthusiast in the crypto space, this paper is a must-read. Plus, the argument is much simpler to understand than a lot of circulating white papers that rely on overly complicated jargon to mask their flaws.
GBTC Premium Rebounds, Almost Positive Again
The GBTC premium was the main institutional trade for many months. The product was trading up to 30% over the spot price of Bitcoin for quite a while. As most of you know, this flipped negative to around 20% recently and stayed there, which is bad for the market. Now it is almost back to even, so worth watching.
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