The Wolf Den #433 - Russia Proposes Crypto Legislation
Bitcoin Thoughts And Analysis
WEEKLY CHART
Bitcoin continues to act out the most painful possible scenario for bears and late shorters, offering few meaningful dips and grinding upward.
Shown above are all of the key levels on the weekly chart, with a fresh level in blue. I made it blue to show that it is new and less meaningful for now. It is acting as resistance, but this weekly candle is not yet closed.
The area between each horizontal black line can be considered a range. The break above 42K put us back in the zone between 42K and 53K, where we traded for over a month. This "should" mean that we at least revisit the low 50Ks.
From the perspective of supply and demand, price is pushing through a key level of resistance. Demand areas are created when price rapidly pumps, leaving orders behind yet to fill. Supply areas are created when price rapidly drops, leaving sellers questioning whether to sell lower or wait for price to return. You draw them off of the last down or up candle of a move, respectively.
A close above the blue zone would be very bullish for Bitcoin. We will have to revisit on Monday, after the weekly Sunday night close.
DAILY CHART
$45,478 is the key resistance on the daily chart. This is where price was perfectly rejected two days ago. Bears were euphoric on that rejection, but as I pointed out, the 50 MA was close below and likely to be retested as support. It is rare to see the 50 broken with conviction and then immediately fail.
Bulls needs to see a flip of $45,478. That's the key right now, so you are longing into resistance here if you do not wait. Never a great idea.
As expected, price traveled from the bottom to top band. Now the bands are expanding once again, with the upper band pointing up and price following. That's good news, because resistance is rising.
After confirming bullish divergence and breaking resistance. MACD is screaming upwards, with both the MAs and histogram looking like bullish monsters. We still need to break resistance, but this is looking very positive.
BOTTOM LINE - Bitcoin is at strong resistance, so bulls needs to sit on their hands until it is broken. That said, signs are indicating that we are consolidating below that resistance and should eventually push through.
Altcoin Charts
I do NOT share signals in this section. I share setups and charts that I am watching, in an effort to help show you how I view a chart and what criteria would be necessary for me to consider taking a trade. NEVER blindly buy something because it is listed in a newsletter or posted on twitter. You need to have a plan when you enter a trade. These are just ideas, and are almost always “if, then” scenarios. If a certain set of things happen, then I would consider a trade.
Right now, the market is largely showing coins at resistance, but consolidating bullishly. One slight push to the upside, and you will largely be able to throw a dart and make profit on alts. That said, proceed with caution - most are AT RESISTANCE.
DOT/USDT
This is AT RESISTANCE and has not trigger yet. I am looking for a break of the blue descending line AND of $22.66. That would trigger the idea, with the ideal entry being a retest of either or both of those lines. This is as simple of a setup as it gets, with potential targets at each of the black lines (and some smaller ones in between). If this bull run is renewed, this should fly. If Bitcoin dumps again, keep your risk tightly managed.
TLM/USDT
Alien World is one of my favorite metaverse and gaming tokens, and I have been holding it since it launched, riding the volatility. I have a small position that I consider an investment, based on the idea that this class of tokens will perform well.
We have a clean break of .1436, a clear resistance on the chart. We also have a major volume spike on the push, usually a good sign of confirmation. I would be looking for a retest of that level as support. This MAY NOT HAPPEN. Traders who like retests as confirmation often miss the trade completely, which is not an issue. Why? Because there's always another coin.
Targets are the black lines above. As usual, I would scale out slowly at each if we get a renewed bull market.
I would place stop comfortably below .1291. The idea would definitely be invalidated if price closes candles back down there.
Is Meme Season Back?
In this report, we bring to you the latest in on-chain cryptocurrency analysis. We look at the blockchain directly and analyze balances, transactions, and the overall activity of market participants. This gives us a unique insight into the future of the market.
This section is written in conjunction with IntoTheBlock (ITB). ITB is an intelligence company that leverages machine learning and advanced statistics to extract intelligent signals tailored to crypto-assets. IntoTheBlock tackles one of the hardest problems in crypto: to provide investors with a view of a crypto asset that goes beyond price and volume data.
The Wolf Den research team uses IntoTheBlock to dig deeper and get the most important insights about the crypto market.
Is Meme Season Back?
Crypto markets recovered significantly over the past few days, with most crypto-assets recording double-digit gains after the recent drawdown. While many assets have recovered, some assets have outperformed the market, which is the case of Shiba Inu.
Meme tokens such as DOGE and SHIB experienced monumental gains in 2021, as the market saw high amounts of speculation. The problem with speculation is that it provides the perfect recipe for sharp corrections, as the derivatives tend to dominate the market and can often result in high liquidations.
As the market sentiment is slowly turning bullish, by leveraging blockchain's transparent nature we can extract some interesting insights on whale accumulation and a renewed interest from large investors.
Shiba is increasing in price, but with less speculation.
One key trait of hype cycles in crypto is the rush of new participants and traders into a token or group of tokens. This tends to happen as prices reach new all-time highs and speculation becomes widespread.
Although is true that SHIB has soared over the past 7-days, the speculative activity doesn’t appear to be there.
IntoTheBlock’s SHIB ownership indicators
By looking closely at the historical composition of these groups for SHIB, we see two different panoramas for holders in 2021 vs 2022.
The number of traders - Addresses holding for under a month (often referred to as speculators) have decreased considerably if we compare them to the May and November rallies.
During the previous rally, these addresses were solely following the hype and price action, and as the price started to decrease, so did the number of these traders.
So now the question is, who is buying SHIB recently?
IntoTheBlock’s SHIB ownership indicators
Hodlers tend to decrease their holdings late into bull cycles while Traders rush in to buy . This occurred through the double bubble in 2013, as well as in late 2017 and in 2021. Then, a few months after Hodlers begin to increase their balance again, we tend to see the beginning of a new bull cycle.
Through the Balance by Time Held indicator, we measure the aggregate amount of holdings each group owns.
Hodlers - addresses that have been holding for over one year, have increased their SHIB balance over the past 30 days by roughly 32.48%.
And it appears that the institutional or whale appetite has been increasing recently.
IntoTheBlock’s SHIB financial indicators
IntoTheBlock’s large transactions volume indicator aggregates the total volume sent in transfers worth over $100,000. Given the magnitude of this amount, large transactions volume act as a proxy to the level of institutional activity taking place on-chain.
The Volume of these transactions increased considerably this week, recording multi-months high.
A total fo 389.89m were transacted, but what’s more interesting, is that these transactions account for 81% of the total SHIB on-chain volume
SHIB has been reportedly the most accumulated coin by Ethereum Whales over the past few weeks
Legacy Markets
COIN (COINBASE)
While I am not a huge fan of the platform, I am a huge fan of the stock and believe that Coinbase will be one of the most important companies in the world in the coming years. They are at the forefront of mainstream crypto adoption, so I view the stock as a likely winner and have been dollar cost averaging in since the end of the first trading day - at $320. As a result of my dip buying, I am actually in profit on the position.
As a trade, Coinbase appears to be flipping a key resistance level at $208 back to support. This was the range low of the entire first move down when Coinbase started trading, so it's meaningful (in theory). That said, we have a descending blue resistance that needs to be broken to signal a renewed uptrend, and the 50 MA screaming down beyond that. As is always the case on a major dip, there's a ton of resistance left above.
This is a multi year or decade position for me, but I see this as a decent buy the dip opportunity or entry for a trade targeting the lines above.
If you are trading this, you likely need to believe that Bitcoin is also poised to rise.
Chart Requests
Every week I take chart requests from paid subscribers to the newsletter and livestream myself taking a look at the charts. Here they are!
Hold Winners And Cut Losers
“Selling your winners and holding your losers is like cutting the flowers and watering the weeds.” – PETER LYNCH
Investors and traders are often drawn into a strange, seemingly counterintuitive phenomenon - letting their losers run while cutting their winners short. This seems strange, but can be explained easily in the context of the emotional side of trading. In an effort to be “right,” traders will take profit too early in fear that they will eventually be “wrong” if they let it run. On the flip side, realizing a loss on a trade is also an admission that they were “wrong,” therefore compelling a trader to continue losing in an effort to eventually be “right.”
We all know what we SHOULD do, right? We should cut the losers early and let the assets that are performing well keep going to continue to pay for those small losses. It’s a few huge trades a year that make a trader most of their money. These huge trades can’t happen if you cut them short.
Strong hands always prevail.
BlackRock Offers Crypto Trading
BlackRock is slowly coming around to the crypto sector. They are the world's largest asset manager, with over $10T in assets under management, so a shift in policy is akin to the Ever Given making a turn in the Suez Canal. 10T in A
UM is 5x the size of our entire market.
The evolution of BlackRock’s views on crypto has been slow but straightforward. In the past, the CEO has made subtly positive statements, one of the funds has purchased BTC futures, and a crypto ETF has been filed. This is probably a very standard approach to a nascent market. Now that they have dipped their toes, the fund is planning to offer crypto trading to its clients. In addition to trading, the fund also plans to allow investors to borrow using crypto as collateral. BlackRock has yet to make an official press release, on the news, but multiple insider sources have “confirmed” the reports.
Tennessee Proposes Crypto Bill
Representative Jason Powell proposed a bill that, if passed, would allow the state to “invest in cryptocurrency, blockchains, and non-fungible tokens.” The same day that the bill was introduced, a second bill was presented by Powell to make Tennessee a top destination for cryptocurrency and blockchain. This bill aims to “make Tennessee the most forward-thinking and pro-business state for cryptocurrency and blockchain and to foster a positive economic environment for blockchain and cryptocurrency.” With these two bills up for consideration, Tennessee now joins the list of other states actively pushing for positive crypto legislation including Texas, Arizona, Wyoming, Colorado, and others.
The Wolf Of All Streets Podcast Ft. Robby Yung
Robby Yung, the CEO of Animoca Brands is an expert on gamification of the metaverse. As an ambitious pioneer of digital entertainment and blockchain gaming, Robby emerged as a titan far ahead of his industry’s time. According to Robby, the metaverse isn't 5 or 10 years away, it’s actually here now and a lot of us are already tapped in. Listen to this episode to learn how Web3, NFTs, the metaverse, and blockchain are already revolutionizing our lives yet have still barely scratched the surface of what is possible.
In this episode with Robby, we discussed:
Is The Metaverse Here Now?
Being Your Own Bank
We Are Still Very Early
Axie Was Bigger Than Vegas
Does The Metaverse Fix Our Economy?
Are Blockchains Ready To Scale?
Bitcoin Paved The Way
The NFT Craze Has Just Begun
Warner Group Buys Land In Metaverse
Identifying Value In NFTs
Community Is Everything
The Cost To Build In The Metaverse
This episode is sponsored by: ARCULUS and BULLISH
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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.