The Wolf Den #288 - Fear And Panic
Bitcoin Thoughts And Analysis
Bitcoin continues to trade in the lower half of the range that it has been locked into for over 2 months. Volume is nearly nonexistent. Volatility as well. Notably, the fear and greed index remains in "extreme fear" and has for weeks. This is a bit unusual, but is only one indicator worth watching.
WEEKLY CHART
As you know, for 8 consecutive weeks, we saw price rise over the weekend and close above 34K, with wicks below that level. This week it was not to be. This was the lowest weekly close of the entire year, and the first candle in the correction to close below 34K. Not ideal. This is an indication that the demand being shown between 31K and 34K has finally been exhausted - basically the liquidity from this zone has been sapped. That does not mean we have to go lower, but it certainly make a drop to find more liquidity likely.
It's very reasonable to look to the 61.8% Fib area around $27,175, because all assets and especially Bitcoin love to hit that level. This is from the entire move up from $3,800, so it would be a very solid place for a bounce, even if it drops a bit lower into the "golden pocket."
Notice that price just closed last week right on the 50 MA. This is a key line for a lot of traders. Price is currently below, but the week just started.
Regardless, price is STILL RANGING, so we can't look to those levels yet. That can change any time.
DAILY CHART
This is still in a confirmed descending channel, which should statistically break to the upside. The bigger question is whether it visits the channel support first.
We have yet another potential bullish divergence with RSI on the daily - each has led to a nice move up, although not a reversal. Still, notable that price is dropping but buying pressure seems to continue to rise. Some would view this as confirmed already, but I don't think the elbow up on RSI is definitive.
4-HOUR CHART
The blue support has been throughly battered but continues to hold for the moment. We have a confirmed descending local red channel, which also should statistically break to the upside. Still, price has not changed for days, hard to determine what is happening until volume returns.
Legacy Markets
DXY (DOLLAR INDEX)
You know that I am a dollar bear long term after the breakdown of the ascending channel that it was in for a decade. This should eventually head far down to the lows.
That said, I showed the daily looking strong weeks ago on the break of this blue channel. A break above 93.437 would confirm a double bottom, which should send it higher. This would likely be bad for stocks, metals and even Bitcoin. We really want to see it rejected at this level.
It also appears to be rounding out locally and heading up further, a bit of a cup and handle.
Ethereum Price Is Down, Demand Is Up
When prices cease to rise, the news seemingly stops reporting on the important fundamental upgrades and shifts occurring on networks. Instead, media outlets prefer to find FUD to increase their visibility and play into the current sentiment. Joseph Lubin, founder of ConsenSys, recently pointed out in an interview that demand for building on Ethereum has seen a steep increase as of late, despite its 50% drop in price. His quote is below.
“We’re seeing exponential demand for the Ether token to run transactions, to run programs on the network, on top of essentially massively decreasing supply. So we anticipate that there will be an enormous run up in demand and the value of Ether.”
Whether or not the media decides to cover the upcoming London Hard Fork, investors, builders, and smart contract platforms are hyper-aware of the upgrade and are preparing for it. Absolutely nothing has changed my long-term positive outlook on this token. I believe that Ethereum will continue to succeed, regardless of the current and future FUD-seeking headlines.
Tim Draper Foresees 250K Bitcoin
Despite the exhausting sidewards action of Bitcoin, Tim Draper is still on board with his bullish Bitcoin prediction for 2022 or early 2023.
When asked about his beliefs, here is what he had to say, “Yes, I stand by my prediction. $250K per bitcoin by end of 2022 or early 2023. We have had many ups and downs and will continue to, but the global, trusted, decentralized, frictionless, open, transparent bitcoin will become increasingly popular as more and more applications evolve.”
Back when Bitcoin was trading at just $500, Tim Draper made a prediction that it would hit $10,000 by the end of 2017. Not only did he time his prediction well, but he also under predicted the peak by a factor of two. Hopefully, his price prediction this time is also "conservative."
Mike Tyson Spawns Bitcoin Vs. Ethereum Debate
All it takes is a simple question from a celebrity on twitter for all of the major names in crypto to show up and add their two cents. The debate is akin to comparing apples to oranges - both are fruit, both taste good but are entirely different with their own health benefits. Unsurprisingly, most of the commenters pronounced Bitcoin to be superior, but the reasoning was almost entirely based on a repeated laundry lists of the attributes of the token and not the objective advantages.
Owning just one of these tokens still puts you far ahead of the mainstream curve, but to believe in crypto and not even have a small amount of exposure to both is a missed opportunity. There are multiple champions across different sports, and it is my belief that the same can be true for crypto.
Bitcoin Accepted In Vegas Club
Crazy Horse 3, a famous gentleman’s club in Vegas has made history as the first of its kind to accept Bitcoin, partnering with OpenNode to do so. Guests now have the option to use the lightning network for bottles, models, and other “professional services.” I fully support the partnership and adoption, but I recommend you hold onto your “hard assets” while you're there. But as they say, what happens in Vegas stays in Vegas.
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