The Wolf Den #263 - Clean Mining And Musk
Bitcoin Thoughts And Analysis
Bitcoin had a nice Sunday, with price rising and then Elon Musk tweets, helping price to continue up. That said, volume was low and weekend price action is always a bit suspect. Price has now arrived at resistance, so we will see if this is a real move or not in the coming days.
WEEKLY CHART
After consecutive inverted hammer candles on the weekly, we now have a beautiful hammer, with a long wick down and large green body, which closed almost at the weekly highs. That is technically very bullish, but keep in mind that weekly candles and charts are very hard to trade because they can take a very long time to play out. Still, price held all key Fibonacci levels again and is moving in the right direction.
I have added some blue Fibonacci levels to this already muddled chart to show the retracement levels for the move from 65K down to 30K. As you can see, we have barely retraced that move to key levels at all - even the normal 50% bounce would be around 47K, so plenty of room to go up even if the trend is down.
DAILY CHART
Yesterday had a nice daily candle on relatively low volume. This move broke through descending resistance, even redrawn after the failed symmetrical triangle of a week ago. As you can see, there is an impending death cross of the 50 MA (blue) and 200 MA (red) above that many have been watching. As I have been quick to point out, MAs are lagging indicators, so the 50 MA drop is a result of the move down from 65K, not necessarily a harbinger of a drop to come. Still if price interacts with both of those MAs, you would expect an area of resistance - plenty of traders and algorithms place orders around these lines. No matter what, we need to get above 42K to start discussing a true bullish case, and that's where both of those lines are hanging out.
Hidden bearish divergence is still in play until price breaks above the black line at $39,219 and closes there. You can see that RSI broke it's own descending resistance on the daily a few days back, which often is a hint that price will do the same. Drawing lines on indicators can be very helpful.
We really want to see nice follow through today.
4-HOUR CHART
Back to the key resistance in the supply zone that I drew ages ago - the blue box. We also have the 200 MA on the 4hour coming down, which price has not interacted with in quite a while. This blue box has been a major resistance since price bottomed, and already rejected price just a few candles ago, almost to the dollar.
Bottom line - Bitcoin needs serious buying interest and volume to push through all of this resistance on multiple time frames. Maybe Saylor and his 500M can get the job done.
Altcoin Charts
Altcoins still look very risky and difficult to trade. I know that everyone wants setups, but we can't trade the market when the conditions are wrong. Sitting on your hands and doing nothing is sometimes the most powerful trade of all.
BITCOIN DOMINANCE
As Bitcoin has gained some steam, Dominance has risen, meaning that Bitcoin is stronger relative to the altcoin market. This can be easily seen by looking at almost any ALT/BTC pair. If you are one for charting Dominance, which is a bit iffy because it's not a traded asset and therefore does not really have support and resistance based on an order book, then you can see a clear bounce from support. the 50% area was never retested as resistance, so perhaps it is heading back up there soon.
Either way, a large Bitcoin move in either direction will likely be bad for alts, so there are less favorable scenarios than negative ones at the moment if you are in the altcoin market.
Anything can happen, just tough to trade right now.
Live W/ Neeraj Khandelwal Of CoinDCX About Crypto In India
I am going live at 10 AM EST today with Neeraj Khandelwal, the CEO of CoinDCX, which is India's number 1 exchange. We have been hearing conflicting news about the state of crypto in India, about regulation and more, so I invited Neeraj onto the show to get the real story from inside India. This should be great, tune in.
MicroStrategy’s "Junk Bonds" Are In High Demand
Earlier last week, MicroStrategy made headlines when they announced their intention to raise $400m in bonds to buy Bitcoin and were met with 4x the demand they initially sought. In response to the demand, they raised their offering to a $500m cap. This means if they bought right now, they would be purchasing over 12,500 Bitcoin. The offering hasn't officially closed yet, meaning Saylor has yet to purchase the Bitcoin, which the market may be anticipating this week. I said a long time ago that Saylor will obtain 100k Bitcoins, and it is looking like this will be the purchase in which he does it. In no way would I recommend taking on debt to acquire Bitcoin, but spot buying alongside Saylor can be a smart and simple strategy regardless of your skill level. This is a rare chance for retail to front run a purchase by an institution. I wrote a blog on this exact topic. It is linked above.
Will Nigeria Lead The Way For Bitcoin In Africa?
Africa is currently the leading continent in Bitcoin trading volume, but no country has come forward with interest in adopting a Bitcoin standard - yet. This hasn’t stopped Bitcoiners from encouraging their native countries to do so, hence Russel Okung writing a very powerful open letter to the President of Nigeria. Below is just a snippet.
“The Nigerian government, along with every other government in the world, has a once in a generation opportunity to claim global prominence by rising to the occasion. Conversely, a delay in pursuing a national plan for bitcoin adoption will risk a scenario where Nigeria is left behind and its citizens excluded from the possibility of significant wealth creation and preservation.
Nigeria must never carry last - Russell Okung.”
There is not a single other investment community on the planet with the determination, honesty, and will of Bitcoiners and crypto enthusiasts - I am so proud to be a part of this space.
South Africa To Regulate Crypto
South Africa has always taken a laissez faire approach to crypto, but now retail demand and interest is causing their government to take a closer look at regulation. I think that this is going to be a likely trend in most countries, who will be forced by the power of the asset to eventually take it seriously and regulate. The hope, as always, is that regulation will be sensible.
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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.