The Wolf Den #400 - We Hit 400!
Bitcoin Thoughts And Analysis
Bitcoin is boring, hovering around 50K on low holiday volume. Good. Nothing to see here, and allowing altcoins to have a little bit of a party.
WEEKLY CHART
The weekly chart looks good. Bitcoin has held the pattern of higher highs and higher lows for now, so bullish market structure remains intact. Further, you can see the price briefly lost the 50 MA as support on the close last week, but managed to trade back above it this week. This looks very similar to the red circle from July - the blue candles are almost identical. As you can see, that was the bottom of the correction before price headed back up to new highs.
We also have a bullish engulfing weekly candle, which is considered very bullish.
The only question mark is volume, which you expect during the holidays. I consider all of this to be loose signals until after the new year when we likely get meaningful volume back in Bitcoin. We are still ranging, so nothing to celebrate below 53K or so.
DAILY CHART
The daily broke the descending black resistance last week and has continued to chop sideways since. Low volume. Once again, very little to see here, but we do technically have the first signal on this breakout that price could be heading back up. I anticipate at least a test of the 53K region, but nothing is certain.
Altcoin Charts
Bitcoin has been somewhat stable around 50K, giving altcoins room to shine. I am starting to see quite a few appealing setups, but it is important to note that this stability largely comes from low volume holiday trading and that Bitcoin can move and spoil the party at any time. Keep your risk management tight.
While I have not shared that many altcoin setups the past few weeks, the ones that I have posted have been massive. ELON (yes, risky dog coin) made a huge move last week and LUNA has arguably been the strongest asset of all. AAVE also played out exactly as discussed just a few days back. Here are a few more IDEAS. Just setups, not signals.
AAVE/USDT
Most of you likely caught this setup already, and now is a bit late. That said, it should still be heading to around $335 as the initial target, the EQ of the blue trading range. If it breaks that, the range highs are in play for a much larger move. As you can see, price broke resistance and retested it as support within a few dollars, as drawn. The 200 MA is ahead, so expect some trouble there on the way up.
I would not buy this here, personally, but I some of you may be looking at this asset still.
AUDIO/USDT
I have been buying AUDIO slowly over the past few months, ever since they news broke that they were integrating with TikTok and would be a legit Spotify competitor in the future. I love music, I love crypto. That said, I was pretty far underwater, trading this on uniswap with no stop loss. As you know, if I buy on uniswap, I size my position so that it can go to ZERO, meaning I start very small.
Regardless, this coin has made strong moves and is now poised for more upside. $1.805 was a key resistance, so I would like to see a retest of this area (not exact, so spread orders) as support. That would also line up roughly with a retest of the red 200 MA.
You can use Fibonacci levels shown above as resistance and targets.
MATIC/USDT
MATIC made a new all time high over the weekend, breaking through the black resistance. I posted this setup last week, but now it is "triggered." If you did not buy the breakout (riskier), then the safer trade is yet to come - a retest of the previous all time high as support, if it happens. I am in MATIC from under 5 cents or so, so this is not something I am actively trading. It just puts higher targets now in play as price heads into discovery.
SHIB/USDT
Much like ELON, I hate to post this because it is a meme and has minimal value to me. That said, it has a large marketcap, good liquidity, whales are buying it and it's listed on major exchanges. We can trade anything for profit, just want to be clear that this is NOT an investment in my eyes. Simply a way to make some money.
As you can see, price bounced perfectly out of the blue demand zone and is now breaking out of the descending wedge. This should target the recent all time highs, with this break and retest as support.
I am hesitant because there is not much volume, which you really want to see to confirm the breakout. For now, I would trade this anywhere above that blue zone, but keep the position small and risk management tight.
Stay Safe On Telegram
Aside from Twitter, Telegram is one of the top crypto messaging platforms and is where a lot of the inner workings of the space happen. Unfortunately, bad people with bad intentions use this to their advantage to steal crypto. If you haven’t done so already, Telegram has a feature in settings under data and storage that automatically downloads media in chats. While this may be convenient, hackers know this feature exists and can force malware into your device. I suggest you disable this feature and tighten up your privacy by following some or all of the suggestions in the article above. Large Telegram public group chats are the most dangerous place to interact. Be careful out there.
Airdrops Are Taxable
The fact that airdrops are taxable events should be obvious, but do you know exactly when they become taxable? It turns out that there is some clarity on this exact question. Suppose you received $SOS and it went up 10x. Is the entire gain taxable? Not necessarily.
An official memorandum from the IRS clarified the dilemma. When you first gain control over the token (the ability to sell or trade) is the taxable event. When you sell, you may have an additional tax on the gain between the price where you received the coin and unloaded it. But even if you never sell, you definitely owe on the value of the airdrop when it hits your wallet.
I assume this rule sets precedent for hard forks, rewards, and distributions as well. What also matters is the country you live in, as as this is US specific.
There is a lot to take into consideration on these types of events and a lot of unknowns still exist. I highly suggest involving a professional - it might actually save you money.
OpenSea Users Receive $SOS Airdrop
On rare occasions, a too-good-to-be-true story happens to turn out to actually be true. OpenDAO, a name that nobody had heard of just a few days ago, caught the world's attention in the best way possible - by giving out free tokens. The plan was to reward every OpenSea user with $SOS token, which the community graciously accepted and supported. According to the site, “the distribution is based on the total number of transactions (30% weight) and transaction volume on ETH, DAI & USDC (70% weight) on OpenSea.” Meaning it was primarily the community that received the rewards, not VCs as some might suggest.
As the news went viral, the airdrop began to rise exponentially in value nearly 100xing its initial launch price and turning small sums of free money into massive jackpots. Some receivers of the token found 6 and 7 figure sums of $SOS waiting to be claimed. Amazing. Perhaps the most incredible part is that all of OpenDAO’s success happened without permission or affiliation with OpenSea. The success of OpenDAO is a massive tell for what may come in the near future - a new meta for advertising.
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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.