The Wolf Den #307 - Web 3.0
Bitcoin Thoughts And Analysis
DAILY CHART
The golden cross between the 50 EMA and 200 EMA seems certain, likely to complete tomorrow. This is not an indicator I trade, I believe that MA crosses are lagging indicators, but it is important that I point it out because quite a few traders are talking about it. The entire point of charting is to analyze human behavior and make decisions accordingly.
In general, Bitcoin continues to look quite bullish, refusing to retrace. The beauty of this is that the sideways action is starting to reset RSI on numerous time frames, rather than requiring price action to the downside to do so. The negative is that this is forming even more bearish divergences, but one push up would likely invalidate them all.
This price action is very impressive - as you know, I have been watching for a potential retrace to the 40-42K area, but instead we are getting incredibly strong consolidation below resistance (~47K).
Price is once again above the 200 MA, but we need to wait for the candle to close to confirm.
Still following my lucky squiggly line for time being, and I still believe the bands are showing more likely upside.
4-HOUR CHART
Price continues to trade above the red range, which was accumulation and should remain support. As you can see, BTC has formed a key local resistance at $46,759, so we want to see a clean break and close above that level to signal further upside is likely.
Altcoin Charts
FTT/BTC
FTX token looks ready to attack the previous all time high on the BTC pair. If you have been watching this exchange, then you know that their team, led by SBF, is leading the charge towards mainstream adoption, sponsoring the Miami Heat Arena, MLB, Tom Brady etc.
The token is smashing through key levels and appears ready to take a shot at breaking the highs. The current structure looks like a potential cup and handle a continuation pattern often seen after a significant move up. For this to play out (it's just an idea), we would need to see price reach the highs, then consolidate below resistance in a flag or pennant before heading up. I am looking for something like the path above.
This is a setup, not a signal. Right now the potential for a trade is minimal because price is heading towards resistance. Ideally, we want a break of the highs and to ride this coin into price discovery.
TOP 10 COINS
I made a video two days ago with analysis of the top 10 coins - a lot of them are still relevant and starting to play out.
Legacy Markets
TSLA (TESLA)
I have posted a few setups on Tesla of late, which are finally showing some promise. Price consolidated hard against the blue descending resistance before finally heading up. Now it appears to be flipping a key local level at $700, which means it should be headed to the next line - $780.
If you are scalping, I would place stop comfortable below $700 to avoid a wick below. If you are looking longer term, I would place stops below the next support and under the 200 and 50 MAs, both screaming up nicely.
DeFi Hack Resolved
After back-and-forth communication between the hacker and the Poly Network team through embedded messages in Ethereum transactions, the saga appears to have finally come to a close. Almost the entire $610m stolen has been returned and the hacker has decided not to even accept a bounty for finding the exploit. The Poly Network has retracted some of their initial statements and have now dubbed the culprit as a “white hat hacker,” meaning they are in good standing with the individual/entity. This goes to show that you never know who you are dealing with, especially in the crypto space. Take this as a lesson to research and secure your investments - there are a lot of dangerous players in this space. Understand the risks of putting your money into smaller protocols.
Coinbase Retracts Statement About USDC
Coinbase users used to see a simple statement on the app or site regarding USDC - “every coin was backed by one US dollar that was in a bank account.” That statement has been retracted after it was proven false. Circle, the company behind USDC, has disclosed that each coin is not actually backed by an equal dollar. Like Tether, USDC is backed by cash and cash equivalents, including commercial paper and corporate bonds.
There is nothing inherently wrong with this structure. The issue is that investors have been led astray for years. When the Coinbase CFO was questioned about the statements, this was the response: “you can always redeem your USDC for one US dollar and so the spirit of the disclosure was that you can always get a dollar back for the USDC that you hold." With USDT and USDC now both admitting to using cash equivalents as reserves, it’s reasonable to believe that other stable coins are likely to be in a similar situation.
Cardano’s Smart Contract Capability Is Coming Soon
Cardano is currently one of the top performing coins, which is likely the result of Charles Hoskinson's recent announcements about smart contracts. Users and developers have been patiently waiting for smart contract capability and it appears the time has finally come. Hoskinson is making an announcement today on when this capability will arrive. The announcement not only adds much-needed functionality to Cardano, but also keeps the mainnet launch on schedule which investors are highly anticipating. Like Ethereum, Cardano currently has a lot of fundamental steam, which is, in turn, driving the price - it’s a good time to own some crypto.
I posted trade setups on both the ADA/BTC (video) and ADA/USD (newsletter) pairs on Monday.
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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.