The Wolf Den #283 - Sell In May And Go Away
Bitcoin Thoughts And Analysis
WEEKLY CHART
Bitcoin once again close the week with a hammer candle - a long wick down and small body on top. The last 7 candles before this one held the 50% retracement of the move up from $3800 - this 8th candle closed slightly below. Still, it had the long wick down, indicating that there is lots of demand below 34K. 8 candles in a row have closed above 34K after dipping below, pretty astounding.
Regardless, that was the lowest volume weekly candle in months and this remains sideways chop. There is absolutely nothing to see here.
DAILY CHART
The last 7 Sunday daily candles have been green. We have seen an interesting pattern emerge, where Sunday price action is up on low volume, somewhat "saving" the weekly candle.
As you can see, price is still holding ascending blue support on candle closes (not wicks) and price is still in the top half of the descending blue channel, for now. The 50 MA is finally turning flat and not screaming down as resistance. If it turns up, price could follow up with minimal resistance.
Altcoin Charts
BNB/BTC
BNB is back in an interesting spot on the BTC pair. After being rejected from resistance, it appears to be rounding out nicely, making a potential cup and handle pattern (more info on that below). This is just an idea - we would need to see price hit resistance and consolidate in a handle (bull flag etc) and then pop through. Personally, I would be looking to trade a break and then retest as support of that area around .00978. This may never happen. As always, this is a setup, not a signal, so certain things have to happen before this becomes a viable trade. If you bought now, you would be buying resistance which is rarely a good idea.
If this resistance is broken, there's a lot of room for growth above.
KAVA/BTC
Kava has quietly been traveling in a beautiful ascending channel for the entirety of 2021. What is notable is that price broke into the top half of the channel and has now retested the EQ as support. While nothing is ever certain in TA, this flip to support should have price targeting the top of the blue channel. This same idea failed multiple times before, as is often the case, but all we can do is consider trades with good risk/reward, and this has it as long as price is trading in the top half.
Volume is very low, which is the case across the board in crypto and has been this summer.
I am not taking this, or any other trade still, but wanted to bring it to your attention.
Apple Rumors And Bitcoin
A strange rumor began to circulate over the weekend, which was that Apple would announce a $2.5B Bitcoin purchase today. There was 0 proof provided, as per usual. What did happen was Steve Wozniak, the co-founder of Apple, called cryptocurrency and blockchain a “miracle technology.”
Here is the full quote, “it is uniquely and completely a mathematical formula, which is also immutable, so it is almost a miracle of technology." We have seen plenty of wealthy and powerful people step up to the plate and praise Bitcoin. Whether Apple decides to buy Bitcoin or not is a wild card, but at least we can confirm the acquisition of genius on our side - Steve Wozniak.
Major Institution Buys Up MicroStrategy Stock
At the closing bell on Friday, Capital International Investors, a major financial services company, announced the purchase of 12.2% of the outstanding shares of MSTR, which caused the stock to shoot up in price. Capital International acquired 953,242 shares, which are currently worth over $602M, making them the second-largest shareholder in the company.
I just recorded an episode with Michael Saylor, the CEO of MicroStrategy and got right into the most controversial and confusing topic right now surrounding the company - are they at risk of default? It was the first question I asked, and we spent about 30 minutes discussing this exact issue. Saylor covered detail by detail what would happen if Bitcoin’s price were to drop below key levels, if the company would be margin called, how the debt is structured, and his long-term prediction for the company. It was an epic conversation that not only strengthened my conviction in the asset, but also convinced me that the company will probably be fine even if Bitcoin goes further down.
Michael Saylor offered a lot of unique investment strategies in our podcast; he believes that investors will continue to realize that Bitcoin is best suited to be treated as property. Rather than spending it or selling it, he believes the best strategy will be borrowing against your Bitcoin to finance your life. He added that institutions are only just beginning to realize this, and we are only in year 1 or 2 of a 10-year influx of global assets and cash into Bitcoin. The conversation is over 1.5 hours long and releasing this Tuesday. I can’t wait for you to hear it.
Miners Are Getting Creative
Mechanicville Power Station, a longstanding New York based hydroelectric power plant, has found a new profitable hobby with its excess renewable energy - Bitcoin mining. Amidst the crackdown in N.Y. on Bitcoin mining, the CEO of the plant isn’t backing down because his operation is entirely clean. ?The plant was constructed in 1897 and to this day continues to evolve. Initially, the plant was reselling its excess energy, but has found mining to be far more profitable, especially since the recent difficulty adjustment.
Bitcoin is a once-in-a-lifetime opportunity and innovative minds are only beginning to scratch the surface on creative ways to interact with it and secure the network. Stories like these build upon the foundation of the asset - they inspire the little guy to contribute in their own unique way and derive a fair profit from their contribution.
Bitcoin Miners Are Accumulating Coins
According to data from Glassnode and Santiment, Bitcoin miners have resumed accumulating Bitcoin, rather than selling. In the same article, we can see that exchange inflows have reached a 50 day low - another sign that supply is leaving the market.
These are both signs that whales are not currently selling, but rather buying and move coins off of exchanges. Important to note - this can change anytime, and those coins can be sent right back to exchanges.
Paraguay Legislating On Digital Assets
Paraguay is set to vote on legislation surrounding digital assets on July 14th. While the messaging has been somewhat cryptic, with speculators guessing that Paraguay will follow El Salvador in making Bitcoin legal tender, there is no evidence for this claim. Regardless, on June 6, Carlitos Rejala informed his more than 50,000 Twitter followers that digital assets would be connected to “an important project to innovate Paraguay in front of the world.” A July 9th tweets read as follows: "I am here to unite Paraguay , that is why we decided with Senator @FSilvaFacetti to present together the bill #bitcoin on Wednesday, July 14!
Stay tuned since there will be a mega surprise for Paraguay and the world. Something GIANT is coming #Bitcoin #btc
We do know that Paraguay is looking to attract crypto companies and enthusiasts to the country, so whatever is coming should be positive.
Grab your popcorn.
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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.