The Wolf Den #373 - Investor Alert
Bitcoin Thoughts And Analysis
WEEKLY CHART
Bitcoin has continued to correct, but nothing out of the ordinary for now. It is far too early to judge the weekly candle, but what I wanted to show you was the untested former resistance at $53,000. If price continues to drop, this is where I would be looking to buy again. That level was key, as the break to the upside marked a higher high and the end of the local bearish market structure. Keep an eye on that level in the coming days and weeks if price does not reverse from where we are now.
DAILY CHART
I am not saying price will continue down, but if it does, $53,000 would likely finally take daily RSI to oversold and would have panicky investors feeling extreme fear. RSI has been overbought a few times since last hitting oversold in May. We know that RSI ALWAYS eventually makes the trip from one pole to the other.
As you can see above, price temporarily bottomed at the 50 MA on the daily chart, a mean reversion that is somewhat inevitable on any correction. It will be interesting to see if this level holds. For now, we are just retesting support.
The Bollinger Bands failed us finally. I shared my analysis with John Bollinger, who agreed that his indicator was showing that more upside was likely. This proves that charts and indicators can not tell us the future.
What is interesting here is that price bottomed (for now) right at the lower band. We want to see it trading back above the centerline and for the bands to continue expanding upward. The upper band now has turned back down. We do not want to see them expanding downward and price pushing the lower band.
4-HOUR CHART
Utter failure of the inverse head and shoulders that I posted yesterday. I was squarely wrong about this, but the chart says what the chart says. As you can see, we currently have a potential reversal candle, with a long wick down and small body. We need to see where this candle closes to get a better idea, and then wait for confirmation from the next candle. There's quite a bit of volume on this selling, so I would exercise caution.
RSI finally closed oversold on the 4-hour chart, after going overbought multiple times. You know what I will be watching for. My favorite reversal signal is an oversold bullish divergence with RSI on the 4-hour chart. This could require some patience, but I will be looking for a higher low on RSI with a lower low on price on the line chart.
Altcoins
I think it is somewhat obvious that today is not the day to be looking at altcoins after the market correction. Yesterday's RUNE and VET setups failed as short term trades, quickly offering an exit for a small loss. It happens. ADA actually still looks promising on the BTC pair, with clear bullish divergence still forming.
Let's watch and wait for the dust to settle and see what patterns form on the charts.
Let's Talk About All-Time Highs
One of the most hotly discussed topics in the crypto space is what price will be at the next cycle top. I don’t have a crystal ball, but I have done my best to crunch some numbers and share my thoughts. The “magic” number is a cycle peak of $281,820. As a disclaimer, I don’t take this as my final/ultimate/main prediction, it is just one approach my team has used to make our best guess. The blog post above will explain everything you need to know.
Marathon Is Raising Debt
Taking a page out of MicroStrategy’s playbook, Marathon Digital is aiming to raise $500M through the issuance of senior convertible notes. Marathon Digital is one of the largest Bitcoin mining firms in the U.S. and currently holds the most Bitcoin of any miner. According to the press release, the money raised is intended for “the acquisition of Bitcoin or Bitcoin mining machines.”
Marathon’s stock dropped 8% after the news was released - the same reaction we saw when MicroStrategy took a similar approach. No surprises there - Wall Street still doesn't get it. Raising cheap debt to invest in an appreciating asset is the billionaire play book. This should go very well for Marathon.
China Flashes Another Buy Signal
When China bans, you buy. This simple strategy has nearly 100% accuracy when mixed with a little bit of patience. We can't stop China from banning Bitcoin and punishing their citizens, but we can buy the dip to continue proving them wrong. Here's another one:
The Wolf Of All Streets Podcast Ft. Charles Cascarilla
Charles Cascarilla, Co-founder and CEO of Paxos Digital, was an extremely early Bitcoin advocate. While Charles knows that he wasn’t patient zero, he believes that he was one of the first 100 people to use the asset. Charles has made it his mission to build a well-regulated financial institution that enables the movement between physical and digital assets. To that end, Paxos has been the go-to platform for major companies like PayPal and Meta to build in the crypto space. Investors will enjoy this birds-eye view of the industry.
In this episode, Charles Cascarilla and I discuss:
The Early Days Of Paxos
Where Are We With Regulation?
Regulatory Clarity Isn’t Here Yet
Institutional Adoption Is Nearly Here
Are We Ready For Institutions?
The GameStop Debacle
How Does Crypto Fix Our Problems?
Fighting The Legacy System
Some Companies Can’t Keep Up
Partnering With Meta
What Is Needed In The Crypto Space?
This episode is sponsored by: SORARE, HBAR FOUNDATION and AMBERGROUP
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.