The Wolf Den #316 - Control Your Losses... And Your Mind
Bitcoin Thoughts And Analysis
WEEKLY CHART
We just completed 5 green weeks in a row. No surprises that the move is running out of steam for the moment and that we are seeing a bit of action to the downside. The 42K area is still screaming for a bullish retest as support, but no guarantees we get that. Either way, price has found resistance just above 50K at the 23.6% retracement level of the move up from $3,800 to $65,000. Again, no surprises.
I believe we are in a fresh bull run and that dips are for buying. If we see strong price action back in the 30,000s, my bias could change. For now, dips look like an opportunity.
DAILY CHART
This setup played out as anticipated, much like December of last year. As you can see though, the bands are once again tightening and have ceased to rise, a sign that the current move could be exhausted. Bollinger himself tweeted about this, although he openly said it just means to be cautious. For now, we want to see the midline of the BBANDS hold as support, which is being tested at the moment. If that fails, we would likely see a trip to the lower band before the next move, which lines up well with the idea that seemingly everyone shares about a dip to 40-43K.
We have seen persistent bearish divergence with RSI on the daily, but each instance has been eventually followed by hidden bullish divergence, which effectively cancels the bear div. We could once again see hidden bullish divergence if price make a higher low and RSI makes a lower low. This is just an idea, and would only confirm with RSI closing the lower low and then making a clear "elbow" up. I will be watching.
4-HOUR CHART
The demand zone in blue continues to hold, but has been pierced and is therefore exhausted. Bids that were set here have been filled, so now we need to see follow through the upside or the next demand area below will likely be tapped. For now, we have a potential bullish hammer candle forming but still 2 more hours until it closes. If this prints and is followed by another green candle, the small correction would likely be over.
We have a fresh descending resistance line that is confirmed with three touches. A break of this line would signal an end to the correction as well.
Altcoin Charts
In this section, I generally share altcoin charts and setups (not signals). I am careful to only do so when the market is looking bullish for alts. With Bitcoin correcting today, altcoins are looking a bit shaky. We have had epic trades over the past month, but now seems like a good time to watch and wait to see if alt season is going to continue. That said, some coins that are dropping could offer a great opportunity to buy the dip, if the dip continues.
AVAX/BTC
I posted setups on both videos and in newsletter ahead of the large AVAX move. We potentially have a fresh opportunity here on the BTC pair, which largely depends on what BTC does next. AVAX is currently testing a key resistance as support at .0008951. This trade has a high risk reward, because you can set a tight stop or exit if candles close below that level. That does NOT MEAN this is definitely going up, it means you can take a trade where you lose very little if you are wrong, which is what you generally look for. The target is the top line at .0013369. Above that would be price discovery for new all time highs.
ETHEREUM
Not only is Ethereum forming a massive multi-year channel similar to Bitcoin, but it's movement is eerily similar to Bitcoin’s historical price path. When you superimpose the history of Ethereum’s price action from 2016 to today over Bitcoin’s historical chart, you will notice a freakishly similar path of price appreciation. From 2016 until now, they each have had nearly identical price levels at both highs and lows. The only difference is that Ethereum is almost exactly 4 years behind Bitcoin. Assuming this trend continues as shown in the linked chart (we CANNOT ASSUME THIS), Ethereum could go as high as $19,000, roughly where Bitcoin peaked in 2017. If it does, this would provide strong evidence for a deep correction after, since the trend is mirroring Bitcoin. If you aren't a fan of fractal analysis, here is a cool chart that shows Ethereum in a major 2-year channel, headed straight for the same price level.
SOL/USDT
Solana went into price discovery when it broke $58.38. The Bitcoin pair also went into price discovery (not shown) and retested the previous all time high as support. The USDT pair never went down for this retest. If this continues to drop, I will be watching $58.38 for a potential entry. This is one of the best setups you can generally fine - a long time all time high is broken and tested as support for the first time. That has not happened here, so I will be setting bids in case.
Chart Requests
Every Wednesday I take chart requests from paid subscribers and look at the charts on a livestream. Here is yesterday's look!
Microsoft Moving Into Blockchain
Huge news. Microsoft was awarded a patent for a platform that allows users to easily create their own blockchains and manage their own crypto tokens. Imagine a world where creating your own chain or token is as easy as a few clicks on a simple to use platform. It's coming.
Protect Your Assets, NFTs Included
Some scams are obvious. Some you can see coming from a mile away and the attempt is laughable. Unfortunately, not all scams are this easy to spot. With the NFT market booming and a lot of n00bs making a ridiculous amount of money for the first time, the market is primed for thieves to try and steal your NFTs. Linked above is a real example of how a smart and diligent person can be manipulated into losing everything they own. This NFT owner was tricked into screen sharing, ultimately revealing their private keys in a quick moment that seemed harmless. Hackers were patiently waiting for this window. The hackers even had the same name as reputable people, social engineering an identical identity.
Long story short, be extremely careful who you befriend and ask for help. Had these scammers been the real people they were posing as, the exposed private key wouldn't have been an issue. We are all new to the NFT market. If you own NFTs, take the time to store them as safely as you store your crypto. We have all worked so hard to make it this far, only you can look out for yourself to prevent scams like these from happening.
Morgan Stanley Heavily Exposed To GBTC
Morgan Stanley has been quietly adding huge tranches of GBTC to multiple funds. This has been done quietly, but is a clear sign that they are bullish on crypto and looking for creative ways to gain exposure. Many institutions are unable to buy and hold physical Bitcoin due to pre-established rules and risk managers. GBTC, for now, is the easiest instrument for them to use, even though it has high fees and swings wildly from high premiums to debilitating discounts.
Watch what they do, not what they say. Institutions are here.
News Video
Every morning at 8:30 AM EDT, I livestream my market thoughts and review the news. Here is today's video.
Star Atlas
A grand strategy game of space exploration, territorial conquest, political domination, and more.
We are nearing the arrival of a true 3D gaming experience powered by the blockchain. Star Atlas is a next-gen gaming metaverse emerging from the confluence of state-of-the-art blockchain, real-time graphics, multiplayer video games, and decentralized financial technologies.
Current games today have their own closed economies. Some are robust, others fail, but none have taken a step further into the real world. For example, Fortnite’s popular in-game store allows players to purchase collectible skins, but the extent of their existence lies only in the game. The player experiences limited interaction with assets they do not actually own.
Star Atlas has recognized that NFTs are the perfect gateway to provide ownership, authenticity, and a real-life connection to the long hours logged playing a video game. The ethos of Star Atlas is to encourage the monetization of the time spent exploring this huge galaxy and emphasize the ability for monetization to transcend the metaverse to the real world. In Star Atlas, digital assets owned always belong to the holder, and crypto assets earned can be converted into fiat currencies without friction. We believe this is the model for the future of gaming.
To achieve their vision of a metaverse gaming experience mixed with blockchain, the Star Atlas team has selected Solana as the protocol to build out its blockchain-driven massive multiplayer metaverse. According to the team, Solana was an obvious choice due to its processing capabilities of 50,000+ transactions per second at sub-second finality and average transaction costs of only $0.00001. The early iterations of the game are already live, and you can join in on some of the action at the link below. It will be a breakthrough in both the gaming and crypto industry when it is entirely released, and I can't wait.
More info:
Website: https://staratlas.com
Whitepaper: https://staratlas.com/files/star-atlas-white-paper.pdf
Economic paper: https://staratlas.com/files/star-atlas-economics-paper.pdf
Discord: https://discord.gg/staratlas
Telegram: http://t.me/staratlasgame
I did an impromptu live stream with Michael Wagner, CEO of Star Atlas yesterday! You can watch that here.
The Wolf Of All Streets Podcast Ft. Dan Held
YOUTUBE VERSION GOES LIVE AT 1:30 PM EDT!
Dan Held, growth lead at Kraken, is well known for his Bitcoin supercycle thesis, the belief that price will continue to rise exponentially with increasingly smaller corrections. In addition to Bitcoin’s price action, the fundamentals are looking stronger than ever as institutions enter the space, worldwide adoption accelerates, and infrastructure is solidified. If Dan is right, we could possibly see Bitcoin reach a billion users and be worth hundreds of thousands of dollars in the near future.
Dan Held and I discussed:
Exploring the supercycle
The money printer go brrrrrr
One billion Bitcoin users
DeFi on Bitcoin
What about Taproot?
NFT insanity
HODL philosophy
The story of Doge
Working during a bull run
Crypto banking
Bitcoin’s ascent
PODCAST SPONSOR:
Build on Harmony, run on all chains.
Harmony is your open platform for assets, collectibles, identity, governance. Be the ONE to bridge to all blockchains.
Harmony is an open and fast blockchain. Their mainnet runs Ethereum applications with 2-second transaction finality and 100 times lower fees. Harmony’s secure bridges offer cross-chain asset transfers with Ethereum, Binance and other chains.
My Recommended Platforms And Tools
This is where I trade with leverage and can also trade spot with no fees.
This is where I spend my days teaching and learning! Our Discord group is a one stop shop for everything you need to learn to trade and control your emotions. Feel free to DM me on Twitter or respond to this email for questions. Code Wolfsden50%off for a 50% discount on the first month.
This is where I invest, commission-free. They now let you earn interest on your Bitcoin held in Voyager, so you can compound while trading. Not only that, you’ll get $25 in free BTC when you download & fund.
Rewards Code: WOLF25
Mining for everyone! You can buy an ASIC and have it set up at a destination of your choice by them, and you only pay the electricity cost. Absolutely awesome.
I use RoundlyX to buy small amounts of Bitcoin every single day. They automatically round up my credit card purchases (with 10x multiplier) and invest them in crypto. Absolutely brilliant. Passively invest money you don’t need without a thought. Further, they have integrated with Voyager (see above) to offer commission-free purchases.
Rewards Code: WOLF
Concierge Phone Service for Americans that protects your from SIM Swaps and other phone related hacks. I cannot stress enough how amazing this service is.
Follow me on Twitter at @scottmelker. This is where I am constantly updating my trades and sharing ideas.
On-chain and fundamental analysis, research, predictions and indicators, all in one place. Highly recommend.
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.