The Wolf Den #332 - New Mining FUD
Bitcoin Thoughts And Analysis
Bitcoin dropped significantly over night, in what seems likely to be yet another leverage cascade, taking out about 800M worth of longs on the way down. I personally stopped out of my 10x leveraged long, in nice profit over night, but clearly did not maximize the potential gain. I discuss this below. Charts seem to be resetting across the board at the moment.
WEEKLY CHART
Last week's candle was decent, with another long wick down and a green close. Some would call it a hammer, others a long legged doji. Regardless, it's a bullish candle with a small body on top of a wick.
This week just started red, but impossible to judge yet. We will need to see if the week closes with yet another wick down or if price can push lower.
DAILY CHART
Price dropped over night (for me), passing right through both the 50 and 200 MAs. It will be interesting to see if the golden cross area holds as support to end the day, if if that is broken and becomes potential resistance. Once again, this shows us that golden crosses are lagging indicators and are hard to trust for predicting future price action.
The 42K area is still screaming for retest on both the weekly and daily charts.
Price struggled at the centerline of the Bollinger Bands and ultimately was rejected, which means we could see a trip to the lower band (not guaranteed, of course). The bands are beginning to widen, which should indicate more volatility to come.
4-HOUR CHART
As I discussed on my afternoon stream on Friday, I moved my stop loss up for the weekend, knowing that I would not be paying attention to Bitcoin or the charts. Remember this is a TRADE and not an INVESTMENT. I am still buying Bitcoin spot long term, nothing has changed.
I moved my stops up into profit (~$46,250). I stopped out over night. Great trade.
I made good money on the trade, but failed to maximize - gave up more than 50% of the potential profit. That's hindsight analysis, because my intention was never to sell in that area, regardless.
My premise was that I was willing to use leverage to try to catch a massive upside move and ride it for a long time. To me, that was less likely to happen if the top blue support zone broke down, or at the very least it would drop further and give me an opportunity for another entry. This is what happened, although I am flat with minimal intention of jumping back in after that huge candle down. Now I will wait and see what happens.
Oversold bullish divergence with RSI at the bottom, almost overbought bearish divergence at the top. Like clockwork.
RSI is once again oversold, so I will be watching for bullish divergence to form for a signal that we have once again bottomed.
Altcoins
We are clearly seeing a major reset of the market at the moment, with Bitcoin dominating as it drops - a bad recipe for alts. It is currently a blood bath across the board on altcoins, and a good time to step aside and wait. I have no intention of trading alts for the moment, so I will update as soon as the charts reset.
As I said last week, keep doing what works until it doesn't. Now the support levels that were consistently holding, offering profitable trades, are failing. The last round of all time high retests are not working out, so we will look for new entries when the market calms down.
If you have been following any coins and have lowball levels marked as support, this could be a good opportunity to add to your positions if those "stink bids" hit, even if price drops lower for a while.
Research The Applications You Use
Just because a wallet or exchange is recommended in an app store and the branding looks familiar, does not mean it is safe. Apple is currently facing a class-action lawsuit from crypto investors who downloaded the “Toast Plus” crypto wallet from its store. Toast is the name of a popular and reliable XRP wallet, but Toast Plus has no affiliation with Toast. Everyone that downloaded the app and deposited XRP lost 100% of their funds once their key phrase was created. According to the official SEC filing, “the proposed Class(es) consists of 100 or more members; the amount in controversy exceeds $5,000,000.”
There is a good case to be made that Apple is at fault, but a general search of “Toast Plus” would have revealed that it has no relation to Toast and was therefore unsafe. If you want a reliable list of available wallets, search the coin on CoinMarketCap and select the word “wallets” on the coin’s main page. Using XRP as an example, it recommends 11 wallets to safely store XRP.
Always do your own research, and never make an impulsive decision when dealing with your coins.
The Ethereum Burn Leaderboards
track ETH become ultra sound money
Ethereum becomes more scarce as the currency is burned to operate the network. Linked above is the leaderboard, showing the top sources burning the most Ether. Here are the top 10 burners, starting with the leaders: OpenSea, ETH Transfers, Uniswap V2, Tether, Axie Infinity, Uniswap V3, MetaMask, USD Coin, OpenSea (registry), and 1inch V3. The leaderboard is diverse - NFT platforms, transfers, DeFi, stablecoins, and wallets are all contributing to the burn. Since NFTs are cooling off, it is hard to tell if OpenSea will remain number one. Regardless, I perceive the diversity in the leaderboard as a sign of health in the ecosystem.
El Salvador Buys The Dip
Nayib Bukele, the President of El Salvador, tweeted early this morning that El Salvador had bought the dip and is holding 700 coins. He went on to say that "they can never beat you if you buy the dips" and "Presidential advice."
It is hard not to cheer on the efforts of Bukele and the El Salvadorian people, and nice to watch them employ the age old investment strategy of buying the dip. With a long enough time horizon, this strategy rarely fails.
AT&T Being Sued Over Sim Swap
The story here is not that AT&T is being sued, but rather that your assets are not safe if you are utilizing a mainstream phone service and have SMS authentication on your phone. It is absurd that companies like AT&T continue to allow this to happen, but also in the hands of the customer to make sure that a Sim Swap will not result in lost funds.
Most of you know that I have been Sim Swapped in the past, but because I did not have SMS authentication, I did not lose funds. My Google Authenticator is on a separate, offline device.
That said, the Sim Swap caused me months of issues changing passwords and talking with providers, as well as endless stress and lost nights of sleep.
I now personally use Efani, a private phone service to protect my SIM. But at the very basic level, just make sure you do not have SMS authentication for any of your crypto wallets and platforms or your email.
Use separate encrypted email with 2FA (like protonmail) on each account, 2FA on your crypto platforms and ideally yubikey or another hardware solution as well.
My Recommended Platforms And Tools
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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.