The Wolf Den #386 - Market Jitters Are Back
Bitcoin Thoughts And Analysis
WEEKLY CHART
Bitcoin is once again trading in the 50Ks after a nice bounce from the lows. It is too early in the week to tell, but you can see that we currently still have a series of higher highs and higher lows, which retains bullish market structure. A drop below $39,600 would put this at risk. Further, this week has bounced exactly off of the 50 MA on the weekly, a line that many traders will be watching for the next few days and weeks. The descending blue line has also held as support for the moment.
This bullish move will look more convincing when price is back above 53K. Until then, I remain neutral.
DAILY CHART
I have heard much ado about a potential "double top." There was a local double top, which is shown and has played out already.
A macro double top with the April and recent highs is not a concern. A double top is just an idea until the swing low between the two tops I broken. As you know, price dipped to 28K after the crash in May... so for there to be a double top, 28K would have to be broken convincingly, and the target would be, well... near 0.
The daily chart held the 200 MA as support for now, and bounced from demand (blue zone) . Things are looking decent for now, but no confirmation of a reversal yet.
The daily STILL has not reached oversold on RSI. Incredible.
As expected, price mean reverted back into the Bollinger Bands. Price rarely trades below the bottom band or above the top band for very long. This looks like a relief bounce on this indicator. We want to see price back above the blue centerline to start to be convinced of a reversal.
4-HOUR CHART
Price managed to break through the 50% retracement level, which is a positive sign. Every impulsive move tends to at least get that 50% bounce.
Now price has to content with the "golden pocket" which is the area between the 61.8% Fib (where price is basically trading now) and the 65% retracement. This is the most popular area that traders look for a reversal and continuation of the trend. This once again somewhat lines up with the idea that price needs to get back above 53K to start looking bullish again.
CME GAP
Anytime Bitcoin makes a significant move over the weekend, it leaves a gap on the CME chart, because futures are not trading. As you can see, we had a massive gap down. These are often filled, although there are plenty further below that remain. I don't use this to trade, but if you do the gap was just filled.
Altcoin Charts
We are seeing some nice relief bounces across the board, and a few coins practically retracing their entire drops. Clearly there are some very strong assets in this market. MATIC and LUNA are two that I have specifically noticed. I am still hesitant to post trade ideas, because I am not convinced yet that the market is bounced. Perhaps it has and we will "miss" a few opportunities, but better safe than sorry.
ETH/BTC
Ethereum continues to look insanely strong against Bitcoin, managing to rise during the market correction. As you can see, it is testing resistance on the weekly chart. A close above should send this eventually to the all time high against Bitcoin. I still think Ethereum is by far the better trade.
Vitalik's Endgame
For the technically minded readers, I wanted to share Vitalik’s new blog post, “Endgame," discussing Ethereum’s adjustment to achieve scale and security. The topic is complicated. If you aren’t familiar with the popular scaling solutions put forth, much of this will be over your head. It is over mine! Bottom line - Ethereum is seemingly well-positioned to take on scalability and security, although it will take many years. I quoted a few notable segments.
“The profound benefit of the Ethereum rollup-centric roadmap is that it means that Ethereum is open to all of the futures, and does not have to commit to an opinion about which one will necessarily win.”
“It will take years of refinement and audits for people to be fully comfortable storing their assets in a ZK-rollup running a full EVM.”
“But it does look increasingly clear how a realistic but bright future for scalable blockchains is likely to emerge.”
Dogecoin Had A Birthday
Happy Birthday Dogecoin. The coin was actually created on December 6, 2013. It was conceived roughly a year and a half before Ethereum and 6 months before Tether. 8 years in existence - serious staying power in a nascent space where coins come and go frequently.
If you are curious about Doge beyond the memes, I have written two blogs about the coin, each covering different topics. The phenomenon is fascinating to say the least. Linked above is one blog and the other you can click HERE to read.
More Than 25% Of US Investors Own Bitcoin
This nugget is from a study conducted by Grayscale Investments, which found that 26% of American investors own Bitcoin, with 55% of them entering the market in the past 12 months.
This number seems high to me, but I will take it! Bullish.
Whales Bought The Dip
According to Santiment, Bitcoin whales played the Bitcoin dip to perfection. On-chain data shows that they dumped 67K coins before the price went down and added back the same amount during the dump. Whale games!
The Wolf Of All Streets Podcast Ft. David Yermack
After discovering Bitcoin in 2011 and realizing its potential, my guest became the first professor to start teaching crypto as a university course in 2014 with only 33 students. Today he has hundreds of students who study Bitcoin, blockchain, DeFi and NFTs and are defining the shape of the crypto industry. Meet David L. Yermack, Professor of Finance and Business Transformation at New York University Stern School of Business and Chairman of the Finance Department.
This episode is sponsored by: AMBER GROUP, HBAR FOUNDATION, and HORIZEN
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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.