The Wolf Den #325 - The Crowd Rarely Gets What It Wants
Bitcoin Thoughts And Analysis
MONTHLY CHART
When in doubt, zoom out. For those of you that are new here, I have been sharing this chart for years. You can see that price has been in an ascending channel since 2013, testing the bottom almost to the dollar on the drop in March of 2020. Since then price has risen, and has now flipped the EQ of the channel (the center dashed line AKA the equilibrium) to support. The last 4 monthly candles wicked below this level and closed above. From a technical perspective, a flip of the EQ to support makes the top of the channel the target - easily into 6 figures. Tuesday's drop is a small blip on this chart.
DAILY CHART
I am not an MA trader. I find them to be lagging indicators. That said, I keep them on my chart when I notice that other people are talking about them. I find it strange that twitter is so quiet about the likely golden cross between the 50 and 200 MAs after going into mass hysterics over the death cross in June (which was near the bottom). Crosses tend to lag price action, a reaction to what has already happened and not what is to come. That said, price is sitting right on the 200 MA, having just tested the 50 as support. If price remains in this area and we have a cross, it could be more compelling since both lines are interacting with price. We will see.
Bollinger Bands are still surprisingly tight on the daily, meaning that Tuesday's move may not have been the massive volatility predicted by this indicator. As you can see, price found support at the lower band, not breaking down are leading to a major expansion or widening. It is encouraging to see price finding support here without leaving the bands and pushing further down. The vertical lines show the last 3 times band were this tight. Let's hope for a move back to the top of the bands before volatility kicks in... to the upside.
4-HOUR CHART
As I have mentioned for the past few days, this move bottomed EXACTLY at the range highs from the May crash. This was an epic retest, which was also seen on the ETH/USD pair. For now, price is pushing back into resistance, the blue zone that I have drawn. Again, resistance and support or more zones than lines, so this former demand area is now resistance. We are seeing increasing buying volume, which is encouraging. It remains to be seen whether this forms a clearer bear pennant or flag, but for now it does not look like clear bearish consolidation after the drop. It somewhat looks ready to Bart right back up, but hard to trade on that theory.
Altcoin Charts
I am generally in "wait and see" mode at the moment with altcoins trades. Nothing has changed for investments or longer term positions, but after a major market move like we had on Tuesday, it is generally wise to let the charts reset and give a more clear direction. Paid subscribers can attest to the fact that I post a lot of trades when the conditions are solid.
ALGO/USDT
Buy the dip - if it happens. It may not, which is fine. There's always another trade. At this point, Layer 1 protocols are taking their turns exploding, and ALGO look like it's next. I discussed this yesterday on the chart request stream. This is officially in price discovery for new all time highs on the USDT chart, which is what we saw from SOL, ADA and LUNA etc. I am not sure we get a dip to the previous ATH at $1.84, but it's worth setting bids around that area in case there's a big wick or flash crash.
Legacy Markets
SIRI (SIRIUS XM)
I have been in Sirius for ages, and have shared some previous ideas. Last time I shared, it went from $6 to $8 in one day on a short squeeze from Wall Street Bets that I predicted.
Not much has changed since, but this continue to make higher lows, consolidating towards resistance at $6.73. Still looking for a candle close above that level to trigger the move, based on the idea of an ascending triangle.
You can also see there is a golden cross happening between the 50 MA and 200 MA, if that is something you look for.
The real entry is the break of $6.73 and retest as support.
Chart Requests
Every Wednesday, I take chart requests from paid subscribers and live stream my thoughts. Your requests are below. Enjoy!
Uniswap Is Under SEC Investigation
An investigation does not equal guilt. The SEC has refused to comment, but we do know that they are, “seeking information on how Uniswap is used and how the team behind it markets the platform.” Based on what has been made public, we can only assume that they are skeptical and performing due diligence to better understand the model. Uniswap has put out a statement that they are, “committed to complying with the laws and regulations governing our industry and to providing information to regulators that will assist them with any inquiry.” UNI holders and Uniswap users should continue on as usual and wait on more news to surface. Like it or not, the SEC has a strong influence over the space. Just the announcement of the Ripple lawsuit resulted in almost all major exchanges ditching XRP. I am interviewing Hayden Adams, the founder of Uniswap, today for the podcast. I plan to ask him about the investigation and will release the episode as soon as possible.
Stephen Curry Joins Team FTX
FTX’s marketing strategy is targeting the best of the best. They own the naming rights of the Miami arena, partnered with Tom Brady, Trevor Lawrence and Kevin O’Leary, sponsored one of the largest Esports teams in the world, and have now signed a deal with NBA superstar Stephen Curry. The amazing part about FTX’s strategy is the genuine feeling behind each sponsorship. Tom Brady has become an accepted member of the crypto community, Kevin O’Leary has been active in the institutional trenches, and Stephen Curry has shown real interest in NFTs. FTX’s strategy of tapping into the interests of the greats we all respect will work wonders, helping convince newcomers to check out what we have been doing.
Ethereum To $26K - $35K
Research reports always have been the best source of information in the crypto markets. Standard Chartered, a British multinational, bank put out a 17-page report on Ethereum and it is a stellar read. What caught media attention was their prediction for the future valuation of the asset.
"Structurally, we ‘value’ Ethereum at USD $26,000- $35,000.”
"While potential returns may be greater for ETH than for BTC, risks are also higher."
"For this ETH valuation range to be attainable, we assume BTC would also need to trade at the upper end of its valuation range (which we estimate to be $175,000."
$175,000 for Bitcoin seems more than achievable. Hopefully, this does mean a $26,000 valuation for Ethereum. That would be incredible.
$5000 Giveaway!
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Metis - Ethereum Layer 2 Rollups
As much as I love Ethereum as an investment, the platform is oftentimes slow and expensive to interact with. This doesn’t take away from Ethereum’s greatness, but it can be a hindrance to onboarding the next billion users that are eager to spend, transact, develop, and interact with the network. To solve this issue and achieve a more sustainable, flexible, and efficient system, Metis has created a layer 2 solution built on Ethereum. Transactions on Metis Layer 2 take less than 1 second and cost just a few cents (Polygon transaction cost is about $1, Ethereum can be tens of dollars, and at the moment is ranging into the hundreds).
Metis offers a withdrawal time of a few hours vs. days for other Optimistic Rollups and has inexpensive, native, IPFS-based data storage, something Ethereum can’t offer. Since it is built on Ethereum, it’s fully decentralized in a way centralized commit chains are not. Also, there are no complicated code smart contracts: Metis will provide one-click deployment from their own pre-developed templates. This enables not only blockchain projects to migrate onto their Layer 2 quickly and easily,, but even for Web2 developers with ZERO blockchain experience to benefit from Metis Layer 2.
Metis's vision is more than just a temporary fix for Ethereum. So many projects are looking to be a temporary solution, so they probably won't stick around for long. Metis is a hub for the entire Web3 economy, where anyone and everyone can reap the benefits of blockchain without needing to be blockchain experts to do so.
Keep an eye out for their public Testnet release this month and their Mainnet in October.
Check out their Twitter here.
Check out their roadmap here.
The Wolf Of All Streets Podcast Ft. Alex Gladstein
Everyone buys Bitcoin for a different reason, but there is one thing about Bitcoin that we all stand behind - the benefit to humanity. Alex Gladstein, from the Human Rights Foundation, shared why Bitcoin matters for the advancement of financial freedom. For the bulk of humanity that are subject to oppressive regimes, live with tyranny or deal with inflation, Bitcoin is a life raft. As Alex elaborated on in the podcast, Bitcoin is “an escape hatch from tyranny” and “Trojan Horse for freedom” - Bitcoin is our treasure.
Alex Gladstein and I discussed:
Bitcoin is for freedom
Do I save or spend my Bitcoin?
Trickle-down Bitcoin economics
Personal and geopolitical Bitcoin
Bitcoin mining and governments
Bitcoin in Afghanistan
Bitcoin fixes this
Are CBDCs good?
Where do stablecoins fit in?
Accessing the dollar
Evolving monetary systems
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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.