The Wolf Den #317 - Strong Opinions, Weakly Held
Bitcoin Thoughts And Analysis
DAILY CHART
Price is currently holding the middle support of the Bollinger Bands, with potential tweezer bottoms, a signal of a bullish reversal. That depends on how the candle closes. We want to see price hold the center of the bands, but nothing looks bearish here yet.
Potential hidden bullish divergence, as discussed. We need to see a clear elbow up on RSI at the daily close to confirm. This would cancel the bear div.
4-HOUR CHART
Demand holding for now - the blue zone. We saw a number of wicks up, and finally a candle that push through this, eliminating that supply and closing higher. That's a decent sign. I want to see a break of the descending black line now to signal that price is likely to head back up. That line has 3 touches.
Altcoin Charts
KAVA/USDT
Revisiting this idea from a few days ago. As you can see, support "failed" at the previous all time high, although I still consider consolidation around support to be bullish. We have seen countless coins go into price discovery in similar situations. This still looks like bullish consolidation to me, as you can see on the 4-hour chart below.
We have a clear descending channel formed, or bull flag. It does not have alternating touches up and down, but does have two on the top and two on the bottom. The trade here is a break of the upper flag resistance, which would likely coincide with a break of the daily resistance as well.
This is all dependent on Bitcoin. No trade here if Bitcoin continues to correct.
Stablecoin Reserves Are At An All-Time High
When stablecoin reserves hit an all-time high on exchanges (they currently are at an ATH) it can either mean one of two things: investors are converting/selling their crypto to stablecoins, or investors are gearing up to buy crypto. Since the market has only cooled off a little bit, the latter seems more likely because we would have seen a deeper sell-off than the current depths.
The past two times that stablecoin reserves hit an all-time high, the price of Bitcoin skyrocketed. Another way of viewing this interaction is that whenever Bitcoin has bottomed, the stablecoin supply hits a new all-time high. It’s a chicken and the egg scenario, but either way, the fundamentals are hinting at an upward-move for Bitcoin in the near term.
Bitcoin ATMs Are Coming To You
Bitcoin ATMs were a rare sight during the 2017 bull run. It is estimated that there are now around 42,000 Bitcoin ATMs in the U.S., likely putting one within driving distance of wherever you are located. These machines offer ease of use and privacy, at the expense of high fees. You can even convert direct cash into Bitcoin, which can't be done anywhere else. The last time I saw a Bitcoin ATM, I messed around on it, and the fee to purchase a full Bitcoin was a few thousand dollars. The markup is INSANE compared to any other platform you can purchase crypto from.
The "Buffett indicator" Screaming For Correction
Warren Buffett's proprietary indicator is indicating a likely stock market crash or correction. We know that this is just one indicator and it is unwise to make financial decisions based on it, but it's fairly straightforward. The The "Buffett indicator" takes the combined market capitalization of all publicly traded US stocks, and divides it by the latest quarterly figure for gross domestic product. It serves as a rough gauge of the stock market's valuation relative to the size of the economy. I think anyone with a brain knows that stock are overpriced, but still interesting to see it confirmed through multiple indicators.
Cuba Moving Towards Crypto Adoption
In the wake of El Salvador's decision to make Bitcoin legal tender, other nations have been considering similar moves. Cuba seems to be pushing forward, looking for a way to recognize Bitcoin and crypto for payments. The dominoes will continue to fall, especially in nations negatively effected by American foreign policy. We can debate endlessly whether this is a good thing, but Bitcoin does not care about religion, politics or bias - it will work for whoever chooses to adopt it.
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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.