The Wolf Den #351 - Drum Roll, Please!
Bitcoin Thoughts And Analysis
Every single Bitcoin purchase I have ever made in my life is currently in profit.
That can change, but this is a reminder to be patient and zoom out. It only took a couple of months! That is NOTHING in markets.
I took endless hate on twitter for buying “the dip” starting at 57k all of the way down to 28k. Could I have had "better" entries? Sure. Do I care? Definitely not.
I had no idea where the bottom would be, I just had conviction that price would eventually be higher.
MONTHLY CHART
We are only half way through the month, so this candle is not closed and therefore cannot be properly analyzed. That said, we can take a look at the past and what is happening now to draw some potential conclusions.
As you can see, price has visited the top of the ascending channel from 2013 two times. The time bars show that, after breaking the EQ (equilibrium, center dashed line), trips to the top were extremely fast. In 2013 it happened in a SINGLE MONTHLY CANDLE. Amazing. So around 31 days.
The second move in 2017 took roughly 122 days from EQ to the top, and actually overshot the channel slightly before touching it perfectly on the subsequent candle.
It has currently been roughly 300 days since price broke the EQ of the ascending channel on this move, far longer already than the previous moves. Remember, the price is irrelevant - it's the percentage gain and relative movement that is key.
Let's assume (which we cannot) that price once again reaches the channel highs. It has every single time it has broken the EQ in the past, and has reached the channel low every time that EQ has broken down (which has taken longer on average). If that happens in February, price would be roughly $235,000, which you may recall has been my price prediction for this cycle based on taking an average of all of the models we could dig up.
At the moment, we have 6 months in a row where price has tested that EQ as support, and for the first time are seeing price move away quickly. Let's hope it continues.
WEEKLY CHART
$59,985.26 was the highest weekly candle close in Bitcoin history.
This move topped out for now almost precisely at that level. A break on the weekly leaves no more resistance to the all time high.
Price has also pushed all of the way through the last major supply zone on the chart, but is trading within it at the moment. This required some serious strength on the ETF news. The bullishness cannot be understated.
We are almost there, I am sure everyone is holding their breath! Just a few days ago, this weekly candle looked like an ugly shooting star. What a difference a few days makes.
DAILY CHART
Price finally cleared the red supply zone and flipped it to support and is now pushing the final resistance on the chart before the all time high - $59,603.
Ultimately, one thing is very clear on most time frames... we want to get above $60,000, because we still have resistance until that level.
Bollinger Bands have been a gift from the analysis gods for the past few months and years. As you can see, just like last December, the bands are expanding upwards and price is tracking the upper band, just like predicted.
Beautiful.
BOTTOM LINE - Things are looking good. Bulls could not ask for anything more at this moment, but there are always levels above to clear. We have potential bearish divergence on many time frames (not worth showing), but largely Bitcoin has been pushing through them. The daily is just hitting overbought again, which is usually when the real power moves start.
Above 60K there is no resistance to the all time high. Above that? Price discovery.
Buy the dip, if you get it.
Altcoins
I know that you do not need another reminder, but Bitcoin continues to look poised for huge moves, which means it's the wrong time to be focused on altcoins, especially on their BTC pairs. Bitcoin Dominance has once again started to pump on the news of a likely ETF approval.
There will be an amazing time soon to aggressively trade altcoins, for those who are interested. But right now, best to sit back and enjoy the Bitcoin show.
What Would A Bitcoin ETF Do To GBTC?
I wrote this blog previously on what could happen to GBTC if a Bitcoin ETF is approved. The blog takes into consideration a spot ETF instead of a futures-based product, which is what will likely arrive first. I don’t think either will be the end of the world for GBTC, but it could bring some significant impacts that investors should consider that own shares of this trust.
Below is a glimpse on what is covered in the blog:
“ETFs are governed under different rules that grantor trusts are not subject to. These laws currently prevent large institutions from investing in GBTC or any trust. An ETF approval would open the doors for a flood of institutional money to gain Bitcoin exposure because a grantor trust isn’t something they can legally invest in. Further, the ETF would likely be much cheaper than 2%.
“This competition could drive investors from GBTC to the ETF. New money entering the ETF and current money leaving GBTC for the ETF would drive the price of Bitcoin up and the price of GBTC price down. This could drive the GBTC price well below NAV. This is speculation but is clearly possible. To make matters worse, this could all happen while the price of Bitcoin increases. On the flip side, if the GBTC trust were to convert into an ETF, it would likely continue to be successful, especially if it is first to be approved.”
Don't Be This Guy
The 3rd largest Bitcoin holder has been very active lately trading Bitcoin’s chop. I have reported a number of times on his massive dip buying activities since the all time high. Just this week, the whale sold 1,500 coins around $56,000 totaling $84,300,000. FOMO must have kicked in, because the next day, the whale repurchased a third of those coins at $57,300…. Yikes.
Timing this market is nearly impossible, so never sell unless that was your plan and you are absolutely sure. The market will end up eating your gains if you are indecisive.
Crypto Is Saving Lives In Afghanistan
With currency shortages and bank closures, Afghans are taking to cryptocurrency as a hedge
Nearly 10 years ago, Roya Mahboob, founder of the non-profit Digital Citizen Fund in Afghanistan, began paying her staff (all women) in Bitcoin rather than the local currency. Her payments today have paid off in a much bigger way than she could have ever imagined. For the women who held onto Bitcoin, they now have the financial freedom to save themselves and their families. Due to the Taliban’s takeover, a large number of Afghani women have successfully led and completed evacuations and safe settlements into new countries due to the power of Bitcoin – amazing.
I discussed this very story long before it broke on the podcast with Alex Gladstein.
United Wholesale Mortgage Will Not Accept Crypto
The news that UWM was going to accept crypto a few months ago was huge. Well, back to the drawing board. From the Cointelegraph article:
United Wholesale Mortgage (UWM), one of the largest wholesale and purchase lenders in the United States, is ditching Bitcoin (BTC) payment plans after running a test.
UWM officially announced Thursday that the company has successfully conducted its first-ever cryptocurrency mortgage pilot, accepting five crypto payments in October and one in September.
The firm did not disclose more information about the test, neither specifying what cryptocurrencies were part of the pilot nor what companies have assisted the firm in completing it.
“We’re proud to be the first mortgage lender to successfully pilot this technology and further demonstrate that we’re innovating for the long term,” UWM CEO Mat Ishbia stated.
But despite running the test successfully, the mortgage company has decided to stay away from Bitcoin payments, citing associated issues like regulation:
“Due to the current combination of incremental costs and regulatory uncertainty in the Crypto space we’ve concluded we aren’t going to extend beyond a pilot at this time.”
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.