The Wolf Den #380 - Pressure Makes Diamonds
Bitcoin Thoughts And Analysis
Bullish divergences are amazing. I posted the ideas constantly last week, so it was nice to see them all play out as they usually do. When you have bull divs on almost every time frame, mostly coming out of oversold, you almost always see at least a local bottom. Let's hope they can give us a full reversal.
WEEKLY CHART
$53,350. Close enough.
As I said a number of times, when everyone is watching a level like 53K, you either get front run by a few hundred dollars, or price nukes through and goes much lower (like the wicks at 42K).
The weekly close was actually potentially bullish, with a hammer candle almost tapping support. The last two candles both have wicks down, indicating demand and buying interest in the mid to low 50s. I am not particularly concerned at all.
DAILY CHART
Bitcoin recaptured the $56,425 level as support and is potentially making a higher low in a series of higher highs and lows that indicates bullish market structure. A higher high now would confirm the fresh higher low. Price is still trading below the 50 MA, which is normal after a breakdown. A lot of traders would consider the bottom in if that was flipped back to support. Last time this took almost 2 weeks to recapture. You can see here how close price came to retesting that 53K level.
Side note, RSI has still not made it to oversold on the daily. That will eventually happen, whether on this dip or another.
4-HOUR CHART
The blue descending resistance is strong. Volume on the move up saw a small spike, but was still relatively meaningless and on the weekend. We want to see some real follow through on volume when price attacks the blue line again.
Hidden bearish divergence is likely to confirm imminently on the 4 -hour, but not on the 6 or 12. This is not a huge deal, it just signals that the bull div is somewhat "over" and that we should watch for further cues to figure out what is likely to come next. Now that we hit oversold, we should head up to overbought eventually.
Altcoin Charts
I scanned quite a few charts and found almost nothing that was compelling. Altcoins still look somewhat corrective, without clear signals that they are reversing en masse. I'm not trading any for now.
LUNA/USDT
This is interesting, because it has not hit the green target yet from the previous bull pennant breakout and it eventually should. We also have a local breakout through a new descending blue resistance on a nice big candle with a volume spike. It's a bit tough to buy in the current spot, so I would look for a retest of the blue line as support or a break above the previous all time high and price discovery. That's at $54.95. Again, I am not trading right now, but this is worth watching.
Grayscale Is Bullish On The Metaverse
It’s usually a good sign when Grayscale is bullish on a particular asset or sector in the crypto space. Love them or hate them, Grayscale is a titan in the industry with an impressive resume and research group to back up their predictions. Aside from their bullish predictions, Grayscale’s reports contain some of the best free educational content in the space. Here are a few of my favorite paragraphs from the report, which you can read in its entirety HERE.
“Crypto cloud economies are the next emerging market investment frontier and the Metaverse is at the forefront of this Web 3.0 internet evolution. The Metaverse is a set of interconnected, experiential, 3D virtual worlds where people located anywhere can socialize in real-time to form a persistent, user-owned, internet economy spanning the digital and physical worlds.”
“The internet has always been about connecting people. Over the past three
decades, internet technology has evolved, and the way we all interact with the
web has evolved with it. Much has changed, but three key eras of online-based
communities could be thought of as:
• Web 1.0 - Netscape connected us online
• Web 2.0 - Facebook connected us into online communities
• Web 3.0 - Decentraland connected us into a community-owned virtual world”
“The market opportunity for bringing the Metaverse to life may be worth over $1 trillion in annual revenue and may compete with Web 2.0 companies worth ~$15 trillion in market value today.”
Mainstream Media Is Failing Us
“Bitcoin Enters Bear Market” was the popular mainstream headline this past weekend, a phrase that will resonate with mainstream readers. By definition, a bear market can technically be considered a 20% price decline from the highs, but usually price has to stay there for an extended period of time. We all know that crypto is by no means in a real “bear market.” The mainstream media loves a catch headline that stokes fear.
YDragon
I recently invested in this project and wanted to share some information with subscribers. You should ALWAYS DYOR and never buy just because I have (or anyone else). I am planning to start testing the platform as a user.
The aim of YDragon is to take the pain of trading, investing and yield-farming away. We spend hours trawling through exchanges, researching projects and crypto news hoping to find a little golden nugget. After finding one we like, we often pay exorbitant fees to participate. YDragon’s platform allows you to invest in a neatly and expertly diversified basket of promising assets with a single purchase. Additionally, the YDragon protocol gives investors access to a range of the most lucrative yield-farming opportunities available.
The project had their dual-IDO on August 13th. The native token, $YDR, went live on Pancakeswap and Uniswap on August 18th. Platform staking is now live, and the inaugural index is going live today at 12pm UTC, which lasts for 48 hours, during which there is a 0% minting fee. You can find out everything you need to know about it right here.
YDragon also recently launched their first official product - Private Blockchain Funds. This is an interesting product not only for investors, but the DeFi space as a whole. The YDragon team gathers investment, and puts these funds to work on less developed blockchains. In doing so, they assist enormously in the operation, growth and development of these chains whilst being able to generate impressive yield in return.
The team and a group of private investors (not me) conducted a test run on the Solana blockchain, investing $50,000, gaining over an 80% ROI in 3 weeks.
Find out more about YDragon on their website. If you are looking for a way to invest in DeFi without going deep down the rabbit hole and choosing individual investments, this could very well be right for you.
Other links: Twitter, Facebook, Linkedin, Reddit, Telegram, and Telegram Announcement.
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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.