The Wolf Den #329 - We Are Still Early
Bitcoin Thoughts And Analysis
DAILY CHART
This has played out as expected, with price finding support at the golden cross of the 50 MA and 200 MA, which is now official.
Yesterday's daily candle was absolutely beautiful - it close near the session highs and effectively engulfed all of the previous candles from the past week. Nothing is certain, but price should be heading back up and erasing the drop from last Tuesday based on these factors.
4-HOUR CHART
Awesome. Price close high enough to invalidate any potential hidden bearish divergence, making both a higher high on price and on RSI. That means that the bull div remains valid and we should see RSI heading into overbought before further correction.
This has also played out perfectly as planned. Price broke out of the descending channel and retested it as support, also flipping the former demand zone that had become resistance into support. This should be heading up, assuming support holds.
Altcoin Charts
MATIC/USDT
I have been holding and trading MATIC for a long time, and it is currently one of my largest positions. If you have been with the newsletter, you are likely in from much lower prices, as I started posting chart on this round at roughly 10 cents.
We have another potential trade on MATIC. As you can see, it has been bouncing between resistance and support levels ($1.25 and $1.71) for over a month. Price has once again retested support, with 5 wicks below and all candles closing above. This is a strong signal that buyers are very interested in keeping price above 1.25. This leads me to believe that price is headed back to at least $1.71, which would be the initial trade. If it flips that area, I believe the highs from a few months ago are back in play. If you are trading this, a close of a daily candle below $1.25 should mean proceed with caution or considering exiting, as lower levels would then be in play with the loss of support.
OCEAN/BTC
I have shared this before, on the breakout from the descending black line. That should still signal that the down trend is over and that price will slowly head back to the highs. That said, it's been quite a bit of consolidation after the breakout on volume, so we should head up again sooner than later. Price is currently working on flipping the 200 MA back to support, and I have drawn a local descending blue line that would signal that this local consolidation is coming to an end. A break of that would be the most reliable signal that this is ready.
PlanB Shares Bullish Chart
In the image above, you can see a yellow highlighted field showing where Plan B predicts that Bitcoin will top out - it extends from 200k to 1m. The updated Stock-to-Flow model, also known as S2FX model is represented by the thick dark green line and it sits at around 288k. I highly suggest you check out PlanB’s work on price predictions. He nailed the 2017 top.
I personally find the harder question to be when the top will come, which PlanB also finds challenging. There is good reason to believe that the year-end will be a turning point for Bitcoin, but the longer price lingers below 100k, the more inclined I am to believe that the run will extend further.
The Metaverse Is Here
Thinking about the potential of the metaverse is enough to bend your mind into a pretzel. It is an evolution of gaming that we are only just beginning to understand and explore, but is where I believe many humans will primarily exist in the not-so-distant future. This article takes the time to break down what the Metaverse is, where you can get started, and a number of tips on navigating this new realm of gaming.
“What is the metaverse, exactly? Is it just one platform, or the sum total of all? Ask 10 different people at a crypto conference, and you’ll get 10 different definitions. We should not expect a single, all-illuminating definition of the ‘Metaverse, writes venture capitalist Matthew Ball. The Metaverse is best understood as ‘a quasi-successor state to the mobile internet’. This is because the Metaverse will not fundamentally replace the internet, but instead build upon and iteratively transform it.”
Fidelity Advocating For Bitcoin ETF
Support for a Bitcoin ETF in the United States is gaining steam behind closed doors. Fidelity, a long time supporter and investor in the crypto ecosystem, had a private call with the SEC and made the case for an ETF. While this in no way means that it will happen, it's important that huge players in the industry are actively advocating for the product, which will likely be the single largest catalyst for institutional adoption and the final wave of mainstream interest.
Gary Gensler In The Hot Seat
The US Senate held a banking hearing yesterday, peppering Gary Gensler with questions about cryptocurrencies and regulation.
"The SEC chief noted the enormity of the task, telling Sen. Catherine Cortez Masto, D-Nev., that the regulator could use “a lot more people” to evaluate the 6,000 novel digital “projects” and determine whether they all qualify as securities under U.S. law.
“Currently, we just don’t have enough investor protection in crypto finance, issuance, trading, or lending,” Gensler said in prepared remarks. “Frankly, at this time, it’s more like the Wild West or the old world of ‘buyer beware’ that existed before the securities laws were enacted.”
Clearly the SEC is vastly understaffed, which means that there is a risk of them making broad and sweeping rules covering all 6000 coins en masse, rather than taking the time to figure out the utility and regulatory definition of each.
This is an interesting time, when the future of innovation of the crypto space for Americans is In the balance - which we know could cause a domino effect worldwide.
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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.