The Wolf Den #328 - Be Careful Trading On News
Bitcoin Thoughts And Analysis
Those of you who have been with me a long time know that I used to trade somewhat aggressively, often with leverage. Yesterday I took my first leverage trade in ages. Rather than hashing the entire thing out here, I talked about it in a video. Price came within about $20 of my stop loss on the Walmart drop, but ultimately reversed up and now price is more than $1000 above my entry at around $44,700. My premise was effectively oversold bullish divergence with RSI at support.
DAILY CHART
Price ultimately close the day below the 50 and 200 MAs, which appear to be in the midst of a "golden cross," when the shorter MA crosses up the longer moving MA. This is considered a bullish signal, but tends to be a bit of a lagging indicator. Price is currently finding resistance at these lines, but working towards flipping them back to support. A lot of traders are watching this, so you should be too.
4-HOUR CHART
This bullish divergence was the premise of my trade - it is my favorite bottom indicator and I was repeatedly posting the idea before it happened. I tend to do that, because I look for them when RSI is oversold. We need price to keep pushing and avoid more hidden bearish divergence, but for now this looks like a likely bottom.
The chart is the same as yesterday. Check out the Walmart candle, with a huge wick up and down. You can see my stop loss, the black line right below the wick. Close, close call. For now, things are looking good.
Altcoin Charts
XMR/USDT
XMR is in an interesting spot. You can see that there is a likely ascending triangle, with a flat top at a very strong resistance, $316.2, and higher lows at support. Price just bounced off of support, which is one of the ways to play an ascending triangle, albeit the riskier one. The safest entry is a clean break above $316.2, with a candle close above on increasing volume, and then a purchase on the retest of that line as support. But buying on ascending resistance has great risk/reward (R/R) because if support breaks, you can take a very small loss or even break even by moving stops up with price.
Confirmation of the ascending triangle happens on the breakout, so this remains an idea. Target Is shown based on the depth of the triangle.
Legacy Markets
MSTR (MICROSTRATEGY)
MicroStrategy is sitting on the 200 MA on the daily chart, strong support since they first bought Bitcoin. It has not traded below this line for more than a day or two at any point in the past year. If you believe Bitcoin will rise, this is a great potential opportunity to buy MicroStrategy stock. We are also back at the same price as the breakout from the blue descending resistance, so this could be a nice opportunity.
MicroStrategy Continues Dollar Cost Averaging
MicroStrategy has purchased another 5,050 Bitcoin, increasing its holdings to 114,042. These leaves two obvious questions unanswered: will MicroStrategy ever stop buying? Will MicroStrategy ever sell their Bitcoin? If you watch Michael Saylor, you certainly get the impressions that the answer to both questions is a firm "no," but there are no guarantees. For now, I think it is safe to say that those coins are in strong hands. If anything with the market changes and they decide to sell, it could be a major downside catalyst.
Another Mining Stock Goes Public
Mining stocks have been a great alternative for gaining exposure to Bitcoin. Starting tomorrow, a new mining company willbe listed on the NASDAQ, assuming the merger goes through. Greenridge can be found under the ticker GREE, listed as class A shares. As of right now, it is hard to point at a clear winner in the mining space, considering all of the companies are performing very similarly. I do expect given enough time, the mining stocks will begin to diverge, as one company pulls ahead in the race and establishes dominance in the sector.
The Wolf Of All Streets Podcast Ft. Edan Yago
Edan Yago from Sovryn makes a bold assertion: “Bitcoin is the first time in 2,000 years we have had a revolution in human rights, specifically in property rights.” As explained in the episode, Bitcoin will not just change the lives of individuals, but it will reshape the way humans interact with each other on a geopolitical level. Right now, Sovryn is working at the forefront of Bitcoin development to turn these ideals into reality.
Edan Yago and I discussed:
Bitcoin’s coincidental price dump
El Salvador’s sovereignty
Why you need financial sovereignty
Bitcoin is digital property rights
What is Sovryn?
Why build on Bitcoin?
Bitcoin backed stable coins
It’s an adapt or die future
What is Sovryn’s vision?
Reprogramming humanity
The most important decision this generation
What is new with Sovryn?
Podcast Sponsor: SORARE
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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.