The Wolf Den #354 - Our Time Is Coming
Bitcoin Thoughts And Analysis
While many scream for a double top (not possible, as I have shown), others are taking a deeper look at why 64K Bitcoin in May and 64K Bitcoin in October are vastly different.
In May, we were experiencing wild retail FOMO, Coinbase was launching and the market was EXTREMELY overleveraged. Longs were piled up to historic levels across derivatives exchanges, largely retail paying high funding for the right to be long. This was an easy opportunity to trigger a liquidation cascade, which quickly sent price to the low 50Ks. 10B in longs were liquidated in a day.
This time, there is minimal retail FOMO - it almost feels like nobody is talking about the all time high. Further, funding is basically flat, which is very surprising and supports the idea that few are particularly excited at the moment. This would lead you to believe that they will still fomo in later, when price rises further. Either way, there are no longs for bears to squeeze, so there will be no leverage cascade down like last time
MONTHLY CHART
Absolutely beautiful for now. That's all, I just wanted to show it to you again! Technical analysis clearly shows that this should target the top of the channel. Big numbers.
WEEKLY CHART
It is far too early to judge the weekly candle - last week at this time the weekly was looking rough. That said, for now we have a beautiful retest of the previous highest weekly close ever as support (purple line). You can see how incredibly close price is to breaking the previous all time high. Nothing bearish on this chart, just an asset pushing against resistance in search of a new all time high. No guarantees it happens quickly - we could consolidate. But a break seems inevitable.
DAILY CHART
Yesterday marked another milestone - the highest daily close ever. Absolutely incredible. For now, that level has also been retested as support.
Once again there is very little to look at on the chart. For now, we are on all time high watch and it's great.
4-HOUR CHART
Zooming in, price broke out of the small range where it was consolidating for a few days. As you can see, the range highs have not been retested as support. No idea if it will be, but that's a reasonable entry for someone looking for a lower time frame position.
Altcoin Charts
ADA/BTC
To be very clear, I am not interested in this at all. A few people asked me to provide some "knife catching" setups, which is exactly what this is. That means you are trying to "catch a falling knife," meaning it is high risk and there's a major chance you buy the "dip" and it keeps dropping.
That said, ADA is extremely rekt on the BTC pair, which is no surprise to me and something that I predicted. It rose to 3rd by marketcap for no fundamental reason. The higher it flies, the further it has to fall.
That said, it is extremely oversold on the daily now and entering the last key support before there would likely be meaningful further downside. I would rather see a bullish divergence form with RSI - so maybe a small bounce, one more drop and then up when Bitcoin is finished.
Either way, this is just above a key demand area and support and is extremely oversold. That is a criteria for some to take a trade.
Legacy Markets
COIN (COINBASE)
I have been buying Coinbase relentlessly on the way down and am now well in profit, with a cost basis between $250 and $260. As I have said many times, I do not use the platform and am not a huge fan, but I still support their efforts and believe that they will be one of the biggest companies in the world.
That said, price is AT RESISTANCE right now at the range highs. This is not a buy at this level, but if we get a clean break above and retest as support, sky is the limit. If that does not happen and price gets rejected, I anticipate we would see consolidation below support. Either way, if we believe that Bitcoin is going to go up and that mainstream FOMO is coming, Coinbase will likely be the biggest beneficiary.
Coinbase Partners With The NBA
Coinbase also gets WNBA, NBA G League and USA Basketball branding as part of agreement.
The NBA x Coinbase sponsorship is another great example of mainstream adoption of crypto. We are starting to see our favorite companies (especially FTX) almost everywhere. The announcement came just a day after Adam Silver, the NBA commissioner, announced the league is projecting $10 billion in revenue for the 2021-22 season, which also marks the NBA’s 75th anniversary. Individual teams have already accepted crypto sponsorships, so this is a natural fit. The deal should be highly visible this season considering it also covers the WNBA, NBA G League, NBA 2K League, and USA Basketball.
BITO (The Bitcoin ETF) Is A Major Success
The Grayscale Bitcoin Trust is the largest bitcoin investment vehicle in the world.
On it's first day of trading, BITO reached $1b in daily trade volume, was nearly the number one traded ETF for the day, and was the second largest ETF launch by volume in history. The ETF outperformed many other major ETFs, including VanEck’s Social Sentiment ETF, SPDR Gold Shares, and ARK’s Space Exploration and Innovation ETF. It’s safe to say that it was a rousing success that defied even the most bullish analysts' expectations. In the seed round, the value of the ETF was around $20m. By the end of the day, the value was about $570m. If the futures-based ETF blew expectations out of the water, imagine what will happen when we see a physical Bitcoin ETF. Grayscale filed for their physical ETF the same day as BITO went live, in a nice publicity stunt that will pressure the SEC. Their trust alone holds about 3.5% of all BTC in circulation, worth a total close to $40b.
Exciting times ahead.
DraftKings Chooses Polygon
In the race for NFT supremacy, Polygon has scored a small victory. DraftKings is a wildly popular company in the United States, started as a place to play daily fantasy football. Now they are clearly moving heavily into the blockchain and NFT space. We have recently seen NFT marketplaces opening across the world - everyone will have one.
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