The Wolf Den #375 - Patience Pays Off
Bitcoin Thoughts And Analysis
WEEKLY CHART
The 53K area is still begging for a retest as support, which would be bullish if successful. This never happened when the line was broken, so better to get it over with now if possible. My only concern is that seemingly everyone is watching this line, which usually means either price bounce above or nukes through. Either way, we are still in a bull market and can start to alter our position if that level breaks down convincingly.
Remember, we could already have bottomed and not even get there.
DAILY CHART
The 50 MA has failed as support on the daily chart, a key level that many traders use for their entries and exits. The last time this happened was in September, and price spent about 12 days below this line before skyrocketing back up. This is not an indicator I generally use, but I wanted to share it because it's the talk of the town.
As you can see, we have a potential bullish SFP or "sweep of the lows." Price held $56,425 as support yesterday, and now has wicked below but is trading above. If this holds like this, it could be an indication that liquidity has been engineered here for a move back up. Nothing is set in stone, and we would want to see a meaningful bounce to follow it up.
I screwed up. I did not take this bearish divergence on the daily chart seriously enough, because I was so heavily biased on the bullish side. This is my own system - overbought bearish divergence is a glaring top signal that I should have paid more attention to. We still have not made it to oversold, which is a reason I am still looking for more downside. RSI will ALWAYS make the trip back from one pole to the other. If it does not make it now, it eventually will - but that could be at much higher price, just like when we dipped in September and failed to reach oversold.
4-HOUR CHART
The potential bullish divergence failed. Both price and RSI made a lower low. That's fine and is the very reason that we wait for confirmation.
The idea is also still in play, albeit at a lower price. A candle close below $55,909 would again have us looking for bullish divergence, if RSI makes a higher low and can make a clear elbow up.
I will be watching, as this is my favorite indicator of a bottom. All time frames from the 12 hour down have now hit oversold and have this div in play.
Altcoin Charts
ETHEREUM
A very quick look at Ethereum, just to show that it is actually performing quite well against Bitcoin. This gives me more confidence that this is just a healthy correction in general, since ETH is a bell weather for alts.
The ETH/BTC pair is actually rising today, after a small drop during this correction. It has held up exceptionally well. It is actually forming a small bull flag and looks ready to break out. I still think the top of the blue range is in play.
ETH/USD also looks good, effectively holding key support. To me, this is the equivalent to Bitcoin retesting 53K, because $4030 looks like the key level here.
“The Fake Environmentalist Attack”
This piece is incredibly well written. Nic Carter and other notable crypto writers contributed, debunking the claims that Bitcoin is bad for the environment. Quoted below are my two favorite paragraphs from the article. I highly encourage you to read this one all of the way through.
“Bitcoin, says Castle Island Ventures' Nic Carter, is a vote of no confidence in the monetary and financial system that exists today, a pretty exclusionary system where we are extremely beholden to the opinions of half dozen individuals that all think the same way."
“In fact, as the bitcoin network grows to support more transactions, it doesn't require additional energy, just as the Federal Reserve Building's electricity bill doesn't increase with every ATM withdrawal. The electricity consumed by mining isn't used to power individual transactions; it's used to power the foundation layer of bitcoin's monetary network, which can then be extended almost infinitely.”
Crypto.com Lands Milestone Sports Deal
One of the more obvious signs of mass adoption this year has been the marriage of crypto and professional sports. Of all the big deals that have been signed, Crypto.com just became the undisputed king, with a $700M 20-year deal to rename the Staples Center to the Crypto.com Center. To rank this one against other notable deals - there was the $175M UFC 10-year sponsorship and $100M Formula 1.5-year sponsorship. Even the FTX arena was only a fraction of this deal, sitting at $135M for 19 years. The masses may not have their money in crypto yet, but there's no way now that they have not heard of it. It’s only a matter of time until everyone swallows the orange pill.
TIME Magazine Is Ahead Of The Curve
TIME Magazine will be holding Ethereum on its balance sheet after agreeing to be paid in the cryptocurrency for a partnership with Galaxy Digital. The partnership came about as a result of TIME’s new focus on the metaverse, which Galaxy Digital wants to sponsor. It’s one thing to see a company involve themselves in crypto, but magnitudes more exciting when they dive in head first. TIME Magazine is ahead of the curve.
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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.