The Wolf Den #384 - Is This What Progress Looks Like?
Bitcoin Thoughts And Analysis
WEEKLY CHARTS
Bitcoin is trading sideways. Don't get chopped up.
Not much to see on the weekly chart. Last week had a nice hammer candle, with this week potentially forming a doji. These are signs of a potential reversal, and indecision at the very least. There are no clear signs that price will continue down for the moment on the weekly chart, unless you are looking for a cleaner retest of 53K. I think the front run we got was "enough." The 50 MA is also down below, but was already retested earlier this year.
4-HOUR CHART
The descending blue line has proved to be less impactful than expected. Welcome to technical analysis! We have a new descending black resistance that we can consider important for now. Either way, there's nothing to do here but wait for some more significant movement.
Altcoin Charts
ATOM/USD
ATOM is breaking out on a significant volume spike. This is the daily chart and there is already more volume than any of the days in the past week. Breakout traders will buy now, while other will look for a retest of the blue lines as support.
Horizontal support and resistance are marked. You can use these for entries and exits as well.
ETH/USD
Simple. Break through resistance. Retest as support.
Trading Gaps
I wrote this article quite a while ago for CoinTelegraph, but wanted to share it again for those of you have not read it. We hear about CME gaps all of the time, but all gaps are not created equal. Here is the quick summary of the 4 types of gaps, but I suggest you read the entire article.
Breakaway gap — This gap is seen when price makes a strong directional move from an area of consolidation. It is particularly powerful for traders when combined with clear patterns on the chart like trading ranges and ascending and descending triangles. A breakaway gap with significant volume after the gap is a sign of a strong trend and is unlikely to be filled. A low volume move creating the space is more likely to see price returning to the area. Bottom line — breakaway gaps are less likely than other types to be filled.
Common gap — These are also known as area gaps, pattern gaps, and temporary gaps. These are the gaps that traders see most often in trading ranges and during sideways movement. They are often filled but offer very little information on what price is likely to do after this occurs. They rarely exist within a notable price pattern on the chart — they are simply areas where there was minimal trading that is likely to be filled.
Exhaustion gap — This type of gap is viewed as a signal that a trend is ending and that a new pattern or trend is likely. They occur near the end of a price pattern and signal a final attempt to hit new highs or lows. Exhaustion gaps generally occur in an area of rapid advance or decline, often on a large move straight up or down. They are normally preceded by a heavy volume spike and often foreshadow a “blow-off top” in an uptrend. These are the most likely gaps to be filled.
Measuring Gap — also known as a runaway gap or continuation gap these gaps occur in the middle of a price pattern and signal a rush of buyers or sellers who share a common belief in the underlying asset’s future direction. Measuring gaps do not occur during consolidation or in an area of congestion. They occur during a rapid price incline or decline. Runaway gaps are not normally filled for a considerable period of time, if ever.
Banks Are Exploring Bitcoin Loans
U.S. banks want to use bitcoin as loan collateral without touching the bitcoin.
Inside sources from the banking world are coming forward with reports that top-tier banks are in the early stages of allowing Bitcoin as loan collateral. Goldman Sachs is reported to be one of the many tier-one U.S banks exploring the option. According to the reporter, “we’ve probably spoken to half a dozen big banks about [bitcoin-backed loans]. Some of them are in the next three to six months category and some are further out. What’s interesting is some of these banks will use their own balance sheet to make the loan. Others will syndicate this out.”
The most likely scenario is that banks partner with existing crypto custodians, outsourcing the most complicated aspects of collateralizing Bitcoin and avoiding adding the asset to their balance sheets.
This would be a MASSIVE step towards mainstream adoption.
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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.