The Wolf Den #444 - Hard Times Create Strong Men
Bitcoin Thoughts And Analysis
WEEKLY CHART
Wow. This candle looked good a few days ago, terrible yesterday, and looks good once again today, with a beautiful long legged doji for now. Once again, it is too early to tell so we will have to wait and see.
As anticipated, yesterday's move hit resistance at 39.6K, the key level that I have been discussing for months.
DAILY CHART
The candle close actually found support once again on the descending blue line, after looking like that line was invalidated. Once again, we always need to wait until the candle close to judge. Even I was preemptive yesterday. The candle had massive volume - there is serious demand below.
39.6K is the key resistance on the daily chart as well.
4-HOUR CHART
Zooming into the 4-hour, we can see that the key resistance is more like $39,300. Price "could" be forming an inverse head and shoulders, but this idea is worthless unless price closes above yesterday's highs. The volume pattern, with a major spike in the head, would be correct if it does play out, but you can't trade on this idea yet.
Yesterday's bullish divergences were beautiful, but it is once again possible that they will be followed by hidden bearish divergence (not shown).
I am cautiously optimistic, but really don't want to once again get overly bullish at a key resistance. Be careful here.
Altcoin Charts
I am still hesitant to share altcoin charts, because many are still below resistance and Bitcoin is unpredictable. This market requires patience, and I am not rushing to call the bottom or start taking unnecessary risk. I am cautiously optimistic.
Legacy Markets
SPY (SPDR S&P 500 ETF TRUST)
Wow. Yesterday I shared gold and silver charts, which both ended up closing the day DOWN after massive moves up. Why? Because markets generally overreact to the idea of war, and then bounce hard and rise once the conflict begins and the uncertainty is removed. I discuss this in the education section below. Since stocks bounced hard, metals got crushed.
As you can see, the SPY confirmed a massive bullish divergence on insane volume with one of the largest bullish candles we have seen. The candle has nearly no wicks, meaning that it opened at the lows and closed at the highs. If there was no wick at all, it would be technically considered a Marubozu Candle.
The candle could just be a gap fill - price opened down so far that coming back up to fill that gap at some point was inevitable. That said, almost every chart looks the same, so it looks like likely reversals across the board, at least for now.
I still expect extreme volatility, swings and ups and downs. Profit taking on yesterday's trades on a Friday is likely to put some selling pressure on the market today. The war may now be priced in, but we still have to deal with the Fed...
How Markets Are Affected by War
There have been quite a few opinions on the effects of war on markets, so I decided to dig into the facts. This article is the best summation that I could find, which tells us that the pundits are generally wrong. Historically, the initiation of conflict has not been bad for markets. I could share the data, but better for you to dig into the article above directly.
Bitcoin Donations Are Pouring In
Below is the opening statement of this article. Incredible.
"In 2021, about $570,000 in Bitcoin donations went to pro-military Ukrainian groups. Today alone, almost $400,000 in BTC has been sent to just one of those organizations, 'Come Back Alive,' according to blockchain analytics."
A country on the brink of a hostile takeover is receiving donations in the form of a permissionless, censorship resistant, decentralized digital money. Banks are being disrupted, currencies are at risk and gold is nearly useless in its physical form. Bitcoin stands strong. Detractors want to take Bitcoin out of the conversation while a country faces ruin, but the truth is it can actually help in a real way.
Ethereum Staking To Become More Attractive
Ethereum stakers and those on the fence and considering staking will enjoy this news. According to a Coinbase article, staking yields are estimated to double post merge, up to 9-12% APR. The rise is attributed to the redirection of the fees miners collect, which will no longer be paid out to them. Also, the article is predicting that the merge will happen around June. Exciting times ahead.
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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.