The Wolf Den #331 - Taking A Loan Against Your Coins
Bitcoin Thoughts And Analysis
WEEKLY CHART
The weekly has not closed yet, but we potentially have a nice bullish hammer forming after last week's down candle. There's clearly still quite a bit of demand, since both of these candles have long wicks down (for now), which indicates heavy buying at those levels and exhausted sellers. We will have to see what happens through the weekend.
DAILY CHART
Nothing has really changed for the past few days - price seems to be consolidating at the center of the Bollinger Bands, right at resistance.
Yesterday's candle was a potential hanging man, leaning bearish depending on today's candle. That same candle would be more bullish at a bottom. It would be on surprise to see price drop down to the 50 or 200 MA to test them as support, but still nothing overtly bearish here.
4-HOUR CHART
I have changed up the 4-hour chart a bit to give a different view, since we have discussed it to death over the past few weeks. We did have bearish divergence (not shown), but now seem to be forming hidden bullish divergence. More importantly, we have a bit of a bull flag forming. That means we could still see price drop to the bottom of the flag and it would remain bullish. I added a few levels to note for the weekend, if price still trades in these areas.
I remain long Bitcoin with leverage, nothing has really changed for me as of now.
Altcoin Charts
Altcoins are looking weak today, as Bitcoin fights to hold the current levels. As I said yesterday, keep trying it until it stops working. It has not stopped working yet, but Bitcoin Dominance looks to be rising after bottoming out and I am seeing some bearish divergence on a number of coins. Also, some of them are potentially failing to hold support on retests, even at all time highs.
For today, I will be sitting on my hands and doing nothing, waiting for more clarity in the market.
Legacy Markets
DXY (DOLLAR INDEX)
Quick thoughts on markets at the moment. Most assets traded inversely to the dollar, and the dollar's strength is judge against a basket of other currencies, represented by the DXY. To be clear, the dollar can be printed endlessly and be a heaping pile of crap, but if other currencies are doing worse, the DXY will still rise.
When the DXY rises, we tend to see weakness in stocks, metals and a bit of pressure on crypto short term as well. The opposite is true when it drops.
Bottom line is that it is always important to keep an eye on the dollar.
As you can see above, the dollar was in an ascending channel starting in the Great Recession. It topped at the EQ of that channel in March of 2020 when the covid crash hit it's peak. Nothing but weakness since, breaking down the channel and retesting it as resistance. Long term, this should signal a return to the 2010 lows.
The daily chart shows a bit of strength after the breakout from the descending blue channel, but clear resistance at 93.437. A clean break through this level would confirm a double bottom and should send the dollar higher. That said, we could see a head and shoulders (just an idea) sending it down further.
Right now it is sideways after the move up out of the channel, so hard to gauge until we get some confirmation either way. But the past few days have been strong.
Take a look at what dollar strength is doing to silver...
XAG (SILVER)
Silver is ranging, so there actually could be a decent buying opportunity if it tests the lows. Now let's see what is happening to gold on this temporary dollar strength...
XAU (GOLD)
Absolutely smashed yesterday and currently breaking support and retesting it as resistance. And how about stocks?
DJI (DOW JONES)
Sustained downtrend and unable to take advantage of any bounce. I think you get the idea. Somewhat impressive that crypto has been doing so well of late.
Trade For Two Reasons
I personally spent 3 years banging my head against the wall trading this market, accumulating sats slowly, and trading my way to profits.
I do not have to do that right now. Because most of my money is invested and not being traded, I have profited well beyond even my own expectations in the past few years. I do not have to trade at this time. Further, to even scale my trades to my portfolio size as an appropriate percentage would be difficult for me, both in terms of slippage on alts and emotions. I have a certain comfort threshold for how much loss I can tolerate on a trade, no matter how big my portfolio becomes. Now, losing 1-2% of my stack on a trade is well above that pain threshold. It does not make financial sense for me to trade very much and is not worth the stress.
To be clear, I still trade when the moment is right and have taken a few more positions of late! I still love to do it. I am just trying to make the point that right now, the investments are doing so well that I feel I have earned a moment to breathe and reflect and enjoy the gains without actively working to grow my account. And that is a result of patience and proper portfolio management for YEARS.
I have talked about this countless times, but there are only 2 reasons to trade - to MAKE MONEY and to EARN FREE TIME. I am at a rare moment where I have done both. I am not going to waste that time, but rather spend it building other things like this newsletter, the podcast, my YouTube channel, etc. And of course, spending more quality time with the family. If any of this describes you, try to take a bit of profit and enjoy the weekend. It may not last forever.
The First Satoshi Statue
The first physical statue of Satoshi Nakamoto has been erected in Budapest, Hungary. The statue is of a person wearing a hoodie with an expressionless reflective face made of aluminum. The artist’s intention is for people to see their own reflection, which spreads the message that “we are all Satoshi.” This is only the beginning of a brand-new chapter in history.
AMC Is Accepting More Than Bitcoin
Earlier this year, AMC Theaters announced that they would be accepting Bitcoin as a payment option. Having been caught in the meme stock craze, the move to accept Bitcoin was natural for the company and on par with their new image. The CEO, Adam Aron, has been outspoken on the positive role of cryptocurrencies and has now announced that “I can confirm today that when we do so, we also expect that we will similarly accept Ethereum, Litecoin, and Bitcoin Cash.”
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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.