The Wolf Den #336 - The Mission Is Advancing
China has once again "banned crypto," making transactions illegal and adding more restrictions on miners and exchanges. While we have learned to laugh off "China FUD," the market is certainly reacting, making charts across the board effectively useless until the dust settles. I would imagine the news will take a bit of time to absorb, as most Americans have not woken up yet, so we could see some more panic selling in the short term. We obviously will not be looking at altcoin charts today!
For me, this China news is fake, and I am adding to my long term holdings at 42K - it is a key support. This is an investment, not a trade. That does not mean others should do the same, but I see this is a very long term buying opportunity.
Bitcoin Thoughts And Analysis
WEEKLY CHART
All eyes are back on the 42K area on the weekly chart. This looked well in the rearview mirror going into the weekend before the China "news" dropped. Now losing 42K as support is back in play, and would be a technical signal that more downside is likely.
DAILY CHART
What is there to say? Bitcoin appears on the cusp of a recovery before the China news hit, sending price down on increasing volume. From a chart perspective, price almost reached the 61.8% Fib, an area of expected resistance. But this is clearly a reaction to the news and we need to wait for the dust to settle. The 42K - 43K area remains the key support that we want to see hold, especially on the weekly chart.
Price is currently back in the range. Ultimately, I still think that a break of the blue line would be the strongest signal that the correction is over.
Ethereum Is Leading In Futures Interest
According to a report from JP Morgan analysts, institutions are less interested in the leading cryptocurrency and showing more interest in Ethereum. "This is a setback for Bitcoin and a reflection of weak demand by institutional investors that tend to use regulated CME futures contracts to gain exposure to Bitcoin.” As for a specific comparison, Bitcoin futures prices are trading below the price of an actual Bitcoin (backwardation), while Ethereum futures have traded 1% higher for the month of September (contango). There is clearly a lot of upside in both assets, but larger players are realizing that they need to inch further down the risk curve for better returns, which is why I have been advocating for Ethereum for a long time now. If you want to front-run the institutions, Ethereum is probably your safest option other than Bitcoin for this bull cycle.
It is important to note that the CME still represents a small percentage of crypto futures trading. Deribit is far and away the leader.
Time Magazine Launched NFTs
The highly anticipated TIMEPiece NFT drop from Time Magazine did not go as smoothly as planned. 4,676 NFTs were sold to a total of just 700 holders in a minute, suggesting bot activity was responsible for the outcome of the drop. Considering the demand around NFTs, this should be expected among any hyped drop until a solution can be found to prevent the behavior. NFT demand is alive and well.
Twitter Stock Rises On Bitcoin News
Bitcoin hits $45,000 on the back of Twitter's BTC tipping integration.
Both Bitcoin and Twitter stock rose on yesterday's news of the integration of tipping to the platform. It is no surprise that Bitcoin saw a bump on the announcement, as the asset is easily moved by large news stories. It is a bit surprising that Twitter's stock price changed, indicating a broader excitement around the asset class.
Bitcoin Price Drops On Renewed China FUD
China has intensified its crackdown on Bitcoin mining and trading
Bitcoin rose on the Twitter news above... and is dropping on this story, which is actually reportedly 9 days old!
Bitcoin dips as old China ban news resurfaces to "FUD" BTC price action.
How many times can China ban the same thing? Quite a few, it seems.
Bitcoin price dropped 5% in a matter of minutes on the news that China is deeming all crypto related transactions illegal.
While this is potentially problematic, it is likely just another headline and piece of China FUD in an endless decade long string of China news related to crypto. I am ready for China FUD to be a thing of the past - it is exhausting.
Owning crypto is still legal in China.
My Recommended Platforms And Tools
This is where I trade with leverage and can also trade spot with no fees.
This is where I spend my days teaching and learning! Our Discord group is a one stop shop for everything you need to learn to trade and control your emotions. Feel free to DM me on Twitter or respond to this email for questions. Code Wolfsden50%off for a 50% discount on the first month.
This is where I invest, commission-free. They now let you earn interest on your Bitcoin held in Voyager, so you can compound while trading. Not only that, you’ll get $25 in free BTC when you download & fund.
Rewards Code: WOLF25
Mining for everyone! You can buy an ASIC and have it set up at a destination of your choice by them, and you only pay the electricity cost. Absolutely awesome.
I use RoundlyX to buy small amounts of Bitcoin every single day. They automatically round up my credit card purchases (with 10x multiplier) and invest them in crypto. Absolutely brilliant. Passively invest money you don’t need without a thought. Further, they have integrated with Voyager (see above) to offer commission-free purchases.
Rewards Code: WOLF
Concierge Phone Service for Americans that protects your from SIM Swaps and other phone related hacks. I cannot stress enough how amazing this service is.
Subscribe to my YouTube channel for free daily content.
Follow me on Twitter at @scottmelker. This is where I am constantly updating my trades and sharing ideas.
On-chain and fundamental analysis, research, predictions and indicators, all in one place. Highly recommend.
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.