The Wolf Den #341 - Be Humble
Bitcoin Thoughts And Analysis
MONTHLY CHART
Bad month, but good monthly close. Price once again held the EQ of the ascending channel as support, keeping 6 figure targets at the top of the channel intact. That is 5 months in a row that have wicked below the ascending dashed support (EQ) and closed above. Strong.
WEEKLY CHART
The week is not complete, so too early to tell. At the moment, we have a beautiful hammer candle, and 7 candles in a row with long wicks down, indicating tons of buying demand every single week, regardless of price. Another weekly close above 42K with a bullish hammer would be a very positive sign.
DAILY CHART
Price is attempting to breakout of the blue descending wedge that I have been discussing for over a week. Confirmation would come at the daily close, with price closing above that line. You can see that the 200 MA is right above, acting as likely resistance, so we need to see a real push and conviction from bulls to push through this area.
Price is pushing through resistance at the centerline of the Bollinger Bands as well. But keep in mind, this is A LOT OF resistance on various charts in this area - 200 MA, BBand centerline, descending resistance etc. Just like people were very bearish at 42K support, I see a lot of exuberance already here at resistance, which we need to see broken with volume. I am leaning towards a bullish breakout, but always keep your emotions in check and your charts unbiased.
I have been talking about this all week in the newsletter and on YouTube. Breakout of the descending line on RSI often precedes a breakout of the same pattern on price. RSI confirmed breakout yesterday at the daily close.
Price looking likely to follow.
Do NOT be surprised if we see a drop down to retest support as resistance, it often happens.
4-HOUR CHART
As I said yesterday, we had a potential "bear pennant" which I viewed as an agnostic symmetrical triangle because it retraced well beyond 50%. It was not a bear pennant after all, and has been invalidated with a break to the upside.
Altcoin Charts
I set at least 10 altcoin alarms during the chart request livestream on Wednesday and many of them are starting to go off. We drew a number of descending blue lines on charts, solid indications that price was ready to head up when broken. Well, they are starting to break. You can revisit that stream and also see a few examples below.
AR/USDT
AR appears to be prepping for another move to the upside, with a break of the blue descending line. As always, the riskier play is buying the breakout, because there is a good chance that price will wick above the line and close below - a fake out. The safest approaches are to buy a retest of the line as support, which often leads to "missing" the trade if the retest never happens. You have to be ok with that possibility. The other approach is to buy the coin after the breakout is confirmed with a close above the line, which means you pay a bit more for the confirmation and need to be prepared for that retest and a bit of a dip if it happens. Either way, a clean breakout here should target the recent all time high. If that breaks, price discovery.
FTT/USDT
Like AR, FTT appears to be prepping for another move to the upside, with a break of the blue descending line. Read the AR description above for how this should be approached.
MATIC/BTC
Same idea. The blue line here is broken, so the breakout is confirmed and price should be heading back to the top of the blue line.
MATIC/USDT
Same idea. The blue line here is breaking, so we need confirmation with a close above. This should send price to around $1.71. Higher targets are in play if that breaks.
The Language Of Crypto
In case you missed this on the blog, we compiled a list of the most common phrases that a beginner might find confusing. These are key to speaking about crypto in its native language. Enjoy!
The US Will Not Ban Bitcoin
During a Treasury Department and Federal Reserve hearing, Federal Reserve Chairman Jerome Powell was explicitly asked about his intentions regarding cryptocurrencies. The question posed was, “is it your intention to ban or limit the use of cryptocurrencies like we are seeing in China?” Below is his response.
“No, we have no intentions to ban cryptocurrencies. Stablecoins are like money market funds and bank deposits, but they are to some extent outside the regulatory perimeter and it’s appropriate they be regulated.”
Our uninformed leaders constantly mix-up Bitcoin, digital assets, cryptocurrencies, and stablecoins. The language that we are familiar with is rarely understood by regulators, causing confusion between us and them. Love or hate Jerome Powell, it seems like he at least understands the basics. Although there was no expectation that the US would ban crypto, it is nice to have some clarity.
Dogecoin And Ethereum Bridge?
Billy Markus, one of Dogecoin’s two co-founders, is urging developers to create a DOGE-ETH bridge. Markus thinks Dogecoin’s ecosystem would greatly benefit from the compatibility, increasing NFT sales and Doge’s utility. As of now, the vast majority of NFTs are purchased with Ethereum because that is the only token most platforms accept. Considering Vitalik is now an important part of the Dogecoin Foundation, this is probably more of a hint than a suggestion from co-founder Billy Markus.
This Is Why We Buy Bitcoin
Myanmar, a country of 54 million people off the coast of Southeast Asia, is currently experiencing an extreme case of hyperinflation. In just the past month, the native currency has lost over 60% of its value, driving up the prices of everyday goods to unaffordable levels. Their central bank has been desperately trying to tether the rate of their currency, but capitulated in mid-September as inflation spiraled beyond their control. To make matters worse, exchange services are shutting down because the volatility is too much to handle, and a military coup is tearing apart the country.
We often forget how important our money is, not just to buy necessities, but to maintain the basic foundations of society. Without a stable currency, everything quickly falls apart and people that are down on their luck are always hit the hardest. Living with the U.S. dollar is an incredible privilege, but it is slowly being undermined - this is why we buy Bitcoin.
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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.