The Wolf Den #303 - Time To Reflect
Bitcoin Thoughts And Analysis
WEEKLY CHART
The brief bear market is technically over. Congrats. That does not mean price cannot drop, it means that if it does, it's a new bear market. The weekly close above 42K and we now have the first higher high after the drop from 65K, which technically means the beginning of a new bull trend. Beautiful weekly candle, things looking great.
DAILY CHART
Beautiful. Clearly above the 42/43K level of concern and continuing to make new highs today. There is some potential bearish divergence with RSI (not shown) , but that's not a major concern for now as we have seen bull runs push through them over and over again, and further movement up will likely invalidate it anyway.
Fresh areas of resistance are marked on the chart above, assuming price continues to rise.
This move continues to look like December. Bollinger Bands tightened, price rose above the bands, consolidated and is continuing up for now.
4-HOUR CHART
Goodbye range! We are finally trading clean above the range, with a retest as support for good measure. Anything can happen, but from a chart perspective the bear trend is absolutely over for now.
Altcoin Charts
Altcoins continue to look shaky on their BTC pairs, which was predictable. As I said before, any major Bitcoin move in either direction was likely to be bad for alts. The USDT pairs looks decent, but Bitcoin has still largely been the better play. Right now, sitting in Bitcoin seems safer, but alts will eventually catch up so as an investor, they're still "cheap."
ETH/USD
The recent Ethereum set up played out nicely, finally breaking the range highs at $3,000 that I have been talking about incessantly. It appears the range highs have now been flipped to support, so the next levels of resistance are marked around $3,600 and the all time high. The market is running very hot, so retracements would be no surprise, but technically ETH looks ready to roll.
Legacy Markets
XAU (GOLD)
Gold crashed yesterday, in one of the largest ever drops for the asset - $60 in about an hour and almost 5%. I have included an article below that goes more into the details of why this happened, as it's far too much to summarize.
From a technical perspective, losing $1756 was big, as that was the key local support going back to April. The quick dip below this level likely triggered stop losses, causing a cascade down to the next key level. These moves are NOT JUST RESERVED FOR CRYPTO - it happens even in legacy markets.
It would be bullish to see gold recapture that level, but it seems that the days of gold being an inflation hedge and a reliable asset may be ending. Bitcoin is clearly the superior option.
If you are trading gold, I hope you caught the bottom of the dip!
Binance US CEO Brian Brooks Steps Down
After just 3 months at Binance US, Brian Brooks announced he was stepping down from his CEO position and leaving the company. In regard to his exit, he said the following: “Letting you all know that I have resigned as CEO of @BinanceUS. Despite differences over strategic direction, I wish my former colleagues much success. Exciting new things to come!” Tthe specifics of the resignation are unclear, but it is widely known that Binance is under regulatory pressure around the world.
Coming from the OCC, Brooks likely had a clear vision on the direction that he wanted to take Binance US with regards to regulation. It is likely that this vision was impacted by the issues Binance is having around the world. Nonetheless, Brooks is an advocate and asset to the crypto space, and it will be exciting to see where he ends up. Alarmists have claimed that this means mayday for the company and that you need to remove all of your funds from the platform immediately, but there is simply no evidence for these claims. Binance is likely just going through growing pains while pushing the boundaries on the regulatory front.
NFTs Are High-Stakes Musical Chairs
NFT cartoon rocks are casually being traded for +$100,000. As the website reads, “launched in 2017, EtherRock was one of the first crypto collectible NFT-type projects on the Ethereum blockchain, having launched shortly after CryptoPunks. Only 100 rocks can ever be available, and each new virgin rock gets more and more expensive.” Created in 2017, the rocks were a breakthrough in the smart contract NFT space, showcasing where the technology was headed and what it could do. While the concept is built around the valuable principles of scarcity, proof-of-ownership, and decentralization, the reality is these rocks are a game of high-stakes musical chairs. Ether rocks are an example of NFT hype on steroids, allowing individuals to flex on each other for owning a rock they paid 6 figures for. Eventually the music will stop. If you aren't knowledgeable about NFTs, I highly suggest you avoid putting money in until you understand them. The concept of NFTs will stay, but the ridiculous hype will eventually die down and someone will be stuck standing with no chair.
As for why people are buying the rocks, here is an interesting thread by one of the owners.
The Infrastructure Debate Has Stalled
The Senate continues to debate the infrastructure bill and crypto amendments after being unable to come to an agreement this weekend. As of Sunday night, it seems like legislators are back to square one. We need to continue to make our voices be heard, calling our senators and reminding them that they work for us.
Even if the bill passes with a version that is potentially harmful, the fight will continue in the house and can even go to the courts. If anything, we have proven ourselves to be a massive force in the political realm, demonstrating our willingness to fight. The only thing I can stress is to not let the conversation die. If you had told me a year ago that Biden's most important bill would be held up because of cryptocurrencies, I would have had you committed. We have come so far and our passion is being debated on the highest stage.
Unfortunately, we aren't the voices that write the law, but we certainly now have an influence over it. The few lines pertaining to cryptocurrency in a trillion-dollar, 2,702-page bill have managed to become the focal point, even though they have little to do with rebuilding US infrastructure. If you haven’t called your senator yet, the instructions are linked above. Even if the battle is lost, the war is far from over.
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