The Wolf Den #323 - El Salvador
Bitcoin Thoughts And Analysis
WEEKLY CHART
Beautiful chart, with yet another large green candle on the weekly. You can see that the hanging man from the previous week was invalidated by this week's candle, and that we once again saw a wick down and then serious buying interest pushing price ahead. With the size of the candle body last week, the bearish case from those wicks is invalidated.
As you can see, price broke through the 23.6% Fibonacci level of the move from $3800 to $65000. Now that level is being retested as support. It is only Tuesday, so we need to wait a few days to see how this shakes out.
DAILY CHART
The idea that I drew last week is coming into play, for now. That is not to say that we will not see price drop further, but this entire area was a key resistance on multiple time frames, so you expect it to be retested as support. For me, nothing has changed here on the drop - simply a retest. We will see if support fails. If so, I will reevaluate.
There is slight bearish divergence on the daily (not shown), but any further drop would likely make a hidden bullish divergence to cancel it out.
4-HOUR CHART
As is the case on the weekly and daily, we also have a first resistance to support flip attempt on the 4-hour chart.
Altcoin Charts
The market is red today, and all eyes are seemingly on Bitcoin and El Salvador. I will take a quick look at ETH, since it tends to give us an idea of what is happening with the altcoin market as a whole. SOL continues to rise, of course.
ETH/BTC
This is the idea that I drew last week, which seems to be coming into play at the moment. We have a retracement to the support and a first retest of that level. This is technically a great R/R long or buy, because the first retest as support usually holds, and a break down is easy to cut off with a small loss.
If this area does not hold, I would look to the EQ of the trading range (dashed line) below.
ETH/USD
Like the Bitcoin pair, Ethereum appears to be testing support against the dollar. We are seeing something similar on the Bitcoin chart itself as well.
I have bids at $3,330 - that is an area that was never retested as support after being strong resistance. If you are more aggressive, $3,650 also looks good.
World Economic Forum Talks Crypto
The World Economic Forum is an independent agency, and identified 4 factors driving worldwide interest in crypto.
From the article: “Central bank policies, hyperinflation, and macroeconomic instability have driven volatility and devaluation of local fiat currencies relative to other global currencies before and particularly during the COVID-19 pandemic. This has caused individuals and corporations such as Microstrategy, Tesla and Square to hold bitcoin and other digital monies. It has also inspired increased advocacy by users and awareness among policymakers from the US to El Salvador who are crafting new policies around cryptocurrencies.”
The WEF also notes that remittance costs are eating up a larger-than-ideal percentage of transactions, potentially explaining the growing attention toward P2P (peer-to-peer) systems found in many cryptos.
Another factor driving interest in crypto assets is the creation and rapid scaling of stablecoins as a much more efficient medium of exchange.
“The market cap of USD Coin (USDC), for instance, has passed $25 billion with a compound annual growth rate of more than 6,100%. Such traction has even inspired Sweden to pivot its planned e-krona in order to compete with such cryptocurrencies and central bank digital currencies (CBDCs).”
Finally, the WEF highlights the wide array of different applications that various digital assets are providing, plus an effort to become greener and consume less energy are causing people to turn their heads toward the crypto markets.
“Such improvements are also propelling DeFi (decentralized finance) application usage. The rapid proliferation and maturation of these innovations is in large part due to the open-source architecture and global developer communities that undergird crypto networks.”
They nailed it!
SEC Warns Investors About Crypto Scams
No surprises here and probably a valid warning for unsuspecting investors. Still notable that crypto has become such a part of the mainstream conversation that the SEC is consistently talking about it.
We've made it.
Standard Chartered Bullish On Crypto - Especially Ethereum
Standard Chartered is one of the largest banks in the UK and just released a new report on crypto. They are bullish on the space, focusing on Bitcoin and Ethereum. Their Ethereum target is an astounding 35K, making it their primary focus. They believe that Bitcoin will 3x from here as well.
This is a trend that we are seeing with many institutions - Ethereum moving to the forefront now that crypto has become more mainstream.
The Wolf Of All Streets Podcast Ft. Ryan Selkis
BECAUSE OF YESTERDAY'S HOLIDAY, THIS EPISODE WILL BE DELAYED A FEW HOURS.
Ryan Selkis joined the Wolf Of All Streets podcast for the third time and shared his take on the current regulatory landscape. Ryan also shared his thoughts on bubbling NFTs, an inevitable Bitcoin ETF, the threat of securities law, and institutional interest in Ethereum. As the founder of Messari, Ryan’s knowledge of the space is unmatched - he is one of the most incredible sources we have.
Ryan and I discussed:
Visa buys an NFT
The JPEG mammal bubble
Is the infrastructure bill a bullish event?
Playing the government’s game
How you and I can defeat regulators
Goldman Gary Gensler and securities law
Navigating crypto regulation
Gamifying assets
A Bitcoin ETF
Making sense of the Grayscale premium
Ethereum’s role in institutional adoption
What is there to look forward to?
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