The Wolf Den #318 - $10,000,00 Per Coin?
Bitcoin Thoughts And Analysis
MONTHLY CHART
The monthly candle closes tomorrow, so it's too early to call this, but it looks extremely likely that the EQ of the ascending channel has been flipped to support. We have 4 monthly candles in a row that have tested that dashed line as support, with wicks below and closes on or above. Very bullish long term. This should indicate a move to the top of the channel - 6 figure Bitcoin.
WEEKLY CHART
Last week closed as a potential "hanging man" candle, which looks the same as a bullish hammer... context matters. When this candle comes in an uptrend, it is a signal of potential exhaustion of the bullish move. When it comes in a downtrend, it is a signal of a potential bottom. The idea is that when this candle comes at the top, it shows that sellers have finally stepped in and are interested at these prices. Bulls were also unable to advance the price during the period.
Confirmation would come with a down candle this week, so worth watching. That said, these can be weak signals and on the weekly can take a very long time to even play out.
DAILY CHART
Bollinger Bands are tightening once again, meaning that we will likely see some coming volatility in the not-so-distant future. They can tighten for quite a bit, but this is a signal that the previous move has somewhat ended and that it's time to pay attention again. For now, price is holding the middle of the bands as support, but a trip to the bottom would not be a surprise. Either way, the next big signal comes with a break above or below the bands.
Bottom line: not much to see here for the moment. Bitcoin is still moving somewhat sideways. A trip back to 42K is still what many are watching for.
Altcoins are looking shaky with Bitcoin dropping today - watching and waiting for now.
Legacy Markets
ARKK (ARK INNOVATION ETF)
Cathie Wood is a Wall Street legend, known for her big bets on disruptive tech. I discussed last week that Michael Burry was heavily shorting this ETF, but has been wrong on tech, including Bitcoin, for quite a while.
Either way, my alarm went off on the break of the descending resistance and the flip of the 200 MA to support. This looks ready to rip to the upside, having retested that resistance as support already. I am buying this today.
Twitter Is Building A Bitcoin DEX
After months of teasing and speculation, Jack Dorsey has officially announced his plans to “create a decentralized Bitcoin exchange.” With looming regulations, centralized exchanges are feeling even more pressure to "know their customers" and comply with new laws. A decentralized Bitcoin exchange would serve as a huge boost to global adoption for new and old users to enjoy Bitcoin in its purest form. Below is an excerpt from one of the executive developers building out the DEX.
“Getting bitcoin today typically involves exchanging fiat at a centralized and custodial service like @CashApp or @Coinbase. These on- and off-ramps to Bitcoin have a number of issues, and aren’t distributed evenly around the world.
This is the problem we’re going to solve: make it easy to fund a non-custodial wallet anywhere in the world through a platform to build on- and off-ramps into Bitcoin. You can think about this as a decentralize exchange for fiat.”
Jack Dorsey may be polarizing, but he is undeniably passionate about the crypto space and decentralizing the world. Love him or hate him, his contribution to the space has been overwhelmingly positive.
The IMF Doesn't Understand Cryptocurrencies
The IMF released a recent blog on the topic of “cryptoassets,” which already tells you all you need to know about their stance. The endless bad takes are hard to overlook. The IMF explicitly recognizes that there are benefits to cryptocurrencies like Bitcoin, but ultimately believes they are a “shortcut” instead of a solution. Here are some of the ideas they shared.
“Some countries may be tempted by a shortcut: adopting cryptoassets as national currencies. Many are indeed secure, easy to access, and cheap to transact. We believe, however, that in most cases risks and costs outweigh potential benefits.”
“Even in relatively less stable economies, the use of a globally recognized reserve currency such as the dollar or euro would likely be more alluring than adopting a cryptoasset.”
“The ecological implications of adopting these cryptoassets as a national currency could be dire.”
“Even in relatively less stable economies, the use of a globally recognized reserve currency such as the dollar or euro would likely be more alluring than adopting a cryptoasset.”
"Attempting to make cryptoassets a national currency is an inadvisable shortcut.”
On the bright side, we have come a long way for the IMF to be studying and commenting on our every move. And the blog wasn't all bad, a lot of the contents were forward-thinking and respectfully accurate. However, it is my belief that a lot of the IMF’s statements along with many other boomer regulatory bodies will be eating their words in 5 to 10 years in shock or hopefully acceptance.
El Salvadorans Protest Against Bitcoin
Bitcoin law protests break out in El Salvador as Central American neighbours wait to see its success
Not everyone is happy about El Salvador's decision to adopt Bitcoin as legal tender. Hundreds of citizens took to the streets to protest this decision, fearing that their pensions and welfare could be paid in volatile Bitcoin rather than the dollar.
The Bitcoin experiment in El Salvador will be interesting to watch. We all want to see it succeed, but there is always the chance that it fails and sets back nationstate adoption.
Whales Are Accumulating Bitcoin
Whales, or wallets holding over 1000 BTC, have been buying Bitcoin again as price consolidates below 50K. They join retail, who have also been buying at these levels. This is verified by on chain metrics and was reported above by Ecoinometrics.
Always trade with the whales - never against them!
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