The Wolf Den #441 - Bitcoin Is One Of A Kind
Bitcoin Thoughts And Analysis
I have been actively trading Bitcoin over the past two days, scalping long positions on the 4-hour bullish divergences. Yesterday I took a profitable long around $37,400, which I closed with a trailing stop (moved stops into profit) around $38,100. Hidden bearish divergence appeared, so my idea was invalidated.
I chose to take another position when I woke up today, seeing another confirmed divergence. I could have had a better entry but was asleep. I am long from $37,100 at the moment, although the bullish divergence occurred a bit lower. I tweeted about both positions, but this is what I had to say this AM.
"Woke up, scalped a long.
Yes, I am trading against the trend. But I am making money using a favorable signal with the chance of catching the bottom.
I was "wrong" yesterday and made good money on the trade.
Execution matters - being right and wrong are meaningless."
"You have balls, you're brave to long."
No trade is "ballsy" or "brave" if you have a plan and are managing risk.
My worst case scenario is losing less than 1% of my trading portfolio, regardless of where I enter. As exciting as watching paint dry, requires 0 guts."
"You know that adrenaline rush you get from watching the order book, entering a trade or staring at the chart?
That's the trading gods telling you that you aren't ready and should go back to paper trading. Taking a trade should be as exciting and routine as checking the mail."
I will move my stops into profit here as well, as the market obviously looks shaky. I have been trading using divs for years, and I do NOT SUGGEST DOING IT until you have practiced and have a feel for the strategy.
WEEKLY CHART
This is a different view of the weekly chart that is interesting, drawing a massive trading range from the 65K highs down to the 30K lows. I could obviously pull this range up to the 69K highs or down to 28K, but that is not entirely accurate. When drawing a range, you take the first high, then the immediate low from the bottom of that move. That makes 69K and 28K slight deviations out of the range, which are common.
Viewing price action in this range, you can see how important the 44K area is at the equilibrium (EQ, dashed centerline). That is right where we saw 2 weekly candles rejected and is clearly a key resistance. A move above that EQ should target the top of the range.
Important to note - continued rejection there would technically target the bottom, so this is an iffy situation at best for the moment.
DAILY CHART
Yesterday I was looking for a retest of the descending blue line as support, which we got. This also lined up with a test of $36,264, although that was front run slightly. To be clear, we are in a bear market and the trend is down. I am looking for signals of relief or reversal, which are somewhat abundant at the moment.
4-HOUR CHART
If you are actively trading, here are the smaller time frame levels to watch. You can see that we have had a meaningful spike in volume over the past two days.
Bull div, hidden bear div, bull div. This is a scalpers dream for trading if this is your system. We could see more hidden bearish divergence if price cannot get above $39,377 or so, so for now I am not ready to look at this as a reversal.
This is also present on the 6 hour time frame, and the 12 hour is now oversold on RSI.
4-hour bullish divergences with RSI are my personal favorite signal on the Bitcoin chart.
Russian Stocks Are Crashing
All the latests news on Crypto, Blockchain, Bitcoin, Ethereum, Tokens, ICOs, Fintech, and more.
As border tensions have grown, President Putin has continued to induce self-inflicted pain on his country's stock market. Just yesterday, the Russian stock index (RTSI) lost 13.21%, continuing the multi-month downtrend. It’s hard to point to the exact reason for the crash, but it's probably a mix of citizens disapproving of the invasion and moving to cash and other countries beginning to initiate sanctions. This story goes to show that one of the effects of a globalized economy is the incentive for countries to behave in good faith or risk pain caused by the outside. It’s hard to prosper when financial backing is pulled away at a moment's notice.
Bitcoin As Legal Tender In California?
Efforts are afoot to make Bitcoin legal tender in California in response to currency debasement.
Amidst a market downtrend and geopolitical events dominating headlines, U.S. states are quietly becoming crypto-friendly. Many have been in the news for drafting and approving positive legislation for cryptocurrencies. California could be the next major state to turn “orange." That said, federal law does not permit individual states to add a new currency as legal tender. There are actually two ways that a state may bypass this in the future. Option A is to defy the Constitution, which is actually common. Option B is to introduce a bill to amend the Constitution, which Arizona is already attempting to do. Once enough states are on board with crypto, the federal government will face pressure and the dominos will fall.
OpenSea Faces Lawsuit
It's been a rough week for OpenSea. Only a few days after the recent hack, they are facing a lawsuit. The plaintiff lost a top-tier Bored Ape NFT, which was resold immediately for $250K. The Ape actually has a value closer to $1M. This may turn out to be a meaningful case for a number of reasons. It is the first lawsuit against an NFT platform and also addresses the persistent problem of phishing. The case may result in a landmark decision, helping set the burden of responsibility on either the user, platform, or both.
The WOAS Podcast Ft. Congressman Ro Khanna
Congressman Ro Khanna is a fierce advocate for crypto and tech and represents California’s 17th Congressional District. He has his work cut out for him - he balances representing both Silicon Valley companies and billionaires and everyday Americans in his district. Congressman Khanna believes that crypto and fintech can be harnessed for good, offering the potential for wealth creation to any and all citizens. If you want to learn what Congress is doing and how you can make a difference, this episode is for you.
In this episode with Ro, we discussed:
Is Cryptocurrency Bipartisan?
Changing Crypto And Investing Laws
How Does Big Tech View Crypto?
The Internet Bill Of Rights
U.S. Laws Around Crypto
Crypto Is In A Nascent Stage
The Concentration Of Wealth Is Serious
The Endless Frontier Act
How Can Listeners Help?
Let’s Make A Difference!
This episode is sponsored by: 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.