The Wolf Den #430 - The Current Market Is A Casino
Bitcoin Thoughts And Analysis
Bitcoin is looking strong, finally starting to flip some key levels of resistance back to support. From a technical perspective, it looks like the bottom is more likely in than not, but we all know how that goes!
WEEKLY CHART
Beautiful movement. Price closed above both $39,600 and $42,000 on the weekly chart, key levels that we have been watching for. The break of $39,600 was important, because when this was lost as support it was a signal that the market had put in a "lower low." Recapturing it is similar to when price broke $53,000 on the way up to $69,000.
As you know, $42,000 has been the key level on the chart for more than a year. Anytime we are trading above it is a good time!
We also have a break of the key descending blue resistance. This should be a sign of a likely reversal, with a technical target of the all time high.
This is also the first consecutive bullish weekly candles since the first week of November, with this week's candle confirming the bullishness of last week's potential reversal. This week's candle closed near the weekly high.
Monster candle for bulls.
All of that said, this entire area is a key supply zone and a major level or resistance. The time to get long was probably lower, so a strategy now would be to buy dips if they come. A retest of $39,600, for example, could be a nice entry. I would expect some retracement, but Bitcoin rarely gives us what we want.
DAILY CHART
Resistance. The 50 MA on the daily is a bit of a "do or die" line for a lot of traders and algos, so it's important to watch. Price tapped it almost to the dollar and is currently below.
Price is also at the Bollinger Band resistance, running beautifully into the upper band. Will take a major push now to head up, so the more likely path is some consolidation.
4-HOUR CHART
As was likely, Bitcoin has made the move from oversold to overbought. It has managed to do it without bearish divergence, which is great. That said, it will take serious volume to push up from these levels without any reset and to also avoid those bear divs. This also leads me to believe that some consolidation here is likely, maybe with price chilling and forming a flag or pennant if it is going to continue up.
Altcoin Charts
I have not been sharing many altcoin setups of late, concerned with the shakiness of the market in general. That said, I recently shared SAND, MANA and EGLD and LINK, all of which have played out in our favor and shared some ideas on a number of other coins that were potentially bottoming.
I continue to be hesitant, as I generally gauge the success of any altcoin trade against Bitcoin, which is outperforming most alts and poised for another big move.
We are in a situation now where many coins I am looking at have had nice movement but are at resistance. So be careful.
SOL/USDT
I recently bought Solana at $116 and then again at $82. Price is back to the $116 support that I chose to take a stab at, and now it is resistance. To be clear, it's not a good idea to buy at resistance. Traders now want to see a clean break of $116 and then a flip to support, a good sign that the bottom is in on Solana and that higher targets are back in play.
No guarantees, this could easily trade above the break back down if Bitcoin remains volatile. But this had oversold bullish divergence at the bottom, has a nice rounding pattern and lots of volume. Good signs if resistance can be broken.
SUSHI/USDT
Like Solana, Sushi is currently at resistance. That said, it just had a beautiful break through descending resistance and perfect retest of that level as support, which is what MANA just did before it's nice move to the upside. We want to see a clean break of resistance at $4.81 and flip to support. This entire area from $4.81 to $5 is really resistance, so a break above $5 would be even better.
The Cryptocurrency Iceberg
I found an incredible thread breaking down and categorizing the full spectrum of cryptocurrency concepts. Tier one are “topics that most beginners are familiar with." Tier 5 includes “only the most esoteric of crypto knowledge.” Topics such as, “blockchain, Bitcoin, and memecoins” can be found in the first tier, with topics such as “sharding, merkle trees, and MEV” in the fifth tier. Most crypto investors will probably land somewhere in tiers 1-4 titled, “beginners, crypto natives, seasoned crypto investors, and deep dive in the rabbit hole.”
As cool as it is to do a deep dive into the most obscure crypto topics, you can be a successful investor at any level of the iceberg. It doesn’t take sophistication or genius to make money. It simply takes a little bit of knowledge and a strong plan.
Bored Ape Yacht Club Doxxed
One of the main selling points for a number of crypto projects is the anonymity of its founders. This is one of the reasons that we have always considered Bitcoin so special. This weekend, Buzzfeed did the unthinkable and doxxed the founders of the Bored Ape Yacht Club, currently the most popular NFT project on the planet. After two of the founders' names were released, Yuga Labs, the company behind the NFTs, confirmed the leak. Public disappointment ensued. Aside from your moral/ethical beliefs on privacy and the right to remain anonymous, I think there is an interesting point to consider - will this have any impact on the collection?
It will be hard to tell whether the doxx effects price, but this is likely a sign that this behavior will become more common place as NFTs become more mainstream. This could link the past of the founders to the price of the collection, adding an entirely new wrinkle in the space.
Consider Bitcoin And Ethereum First
I’m not sharing this Tweet to dunk on Libra. The truth is, I haven't spent enough time on it to form an informed opinion. My purpose for sharing this post lies in the message being conveyed, which is spot on. There are brilliant minds making convincing cases for sub-par projects. It goes to show that multi-billion dollar companies with endless resources to pour into due dilligence can still make crappy decisions. If you have bought any Bitcoin or Ethereum and scored a profit, pat yourself on the back. I’m serious. This space is difficult to navigate.
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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.