The Wolf Den #458 - Bitcoin Is The Life Boat
Bitcoin Thoughts And Analysis
In relative levels of excitement, watching paint dry is currently the Super Bowl and watching Bitcoin price action is local middle school flag football. As I continue to say, forcing charts and ideas for the sake of doing it is pointless, as Bitcoin continues to chop sideways in a persistent down trend.
WEEKLY CHART
The weekly chart has been a Greek Tragedy, chopping up bulls and bears alike with massive wicks and a return to nearly the same weekly close as weekly open on each candle. This is a nightmare unless you are an experienced scalper on small time frames.
Bulls would really like to "fill the wicks" from the previous few weeks. They want to see a close as high as possible, eliminating the upwick from this week and showing that those stifled moves up were futile selling for bears.
The first step is a weekly close above the red line at 39.6K.
Key macro levels remain - 39.6K, 42K, 45.5K, 53K etc. There is almost NOTHING to do or look at for the moment, across markets.
DAILY CHART
We still have two chart pattern ideas to entertain - an ascending channel (not really a bear flag at this point, too long) and an ascending triangle with a flat neckline in the area of the key 45.5K resistance.
For now, price continues to make higher lows, which is a good sign that should bring cautious optimism for bulls. Nothing is confirmed on either pattern unless we see a break of the blue line or a break down of the channel. Otherwise, this is sideways chop.
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.
If you are investor looking to buy dips, I cannot blame you for doing so. That said, this is a really sub-optimal market for trading altcoins, unless you are placing stink bids at major support below price. For now, I still feel compelled to wait on sharing altcoin charts. Remember, sitting on your hands and doing nothing is a decision that can save you money, and is just as important of a position as buying or selling.
I am cautiously optimistic that things could be turning around, but I have minimal interest in rushing into altcoin trades when these could be small relief bounces. Let's wait for Bitcoin to confirm a reversal first.
Chart Requests
Here are the weekly chart requests from Chartapalooza yesterday. As the newsletter is going to be free, I will not be able to take requests in the future, but will make an effort to look at more charts of my own choosing.
Why Exposure To Bitcoin Reduces Overall Portfolio Risk
I have shared this video a number of times over the years, and feel this is a great time to revisit.
This is a spectacular statement from Venture Coinist and Ari Paul on why every portfolio manager and institution should have exposure, even if only minimal, to Bitcoin and cryptocurrency. The basic idea is that risk managers generally look to diversify their portfolios and seek the rare opportunity to expose themselves to assets with more idiosyncratic risk than systematic risk. Systematic risk describes an asset that largely moves with the global economy or market as a whole. Bitcoin and crypto are largely uncorrelated to other markets. So investing in Bitcoin with a small portion of the portfolio offers idiosyncratic risk, which Ari Paul describes in the video as the “Holy Grail of investing.” Watch the video!
Ukraine Legalizes Bitcoin
After receiving over $100M in crypto donations from around the world, crypto has officially become legal in the country of Ukraine. The “Virtual Assets” bill signed by president Zelenskky will allow for a legal framework and adoption of cryptocurrency. Along with the signing of the bill, exchanges are being issued permits to operate, banks will be allowed to open accounts for crypto firms, and the minister of finance is amending the tax code to accommodate digital assets.
Here’s what Ukraine's minister of finance said on the subject: “the signing of this Law by the President is another important step towards bringing the crypto sector out of the shadows and launching a legal market for virtual assets in Ukraine.” This is the second largest adoption by a nation state that we have seen in the last year. The reasons for El Salvador and Ukraine are extremely different, but the solution is the same. Bitcoin is the answer.
The FED Barely Fights Back
Our first interest rate hike of the year has arrived as promised.
Was it strong? No
Will it fix our problems? No
Is it a start? Yes
The last time the FED raised interest rates was in December of 2018. Calling them overdue would be a gross understatement. They settled on 25 Basis points, a meager increase. This was akin to throwing a pencil into a broken damn and hoping it would stop the flood. The Fed is stuck - anything more than 25 basis points would be viewed as overly aggressive. It would basically panic the market.
Considering the FED has made it explicitly clear they intend to raise rates at every remaining meeting this year, we can probably expect them to deliver. We can also expect stagflation.
The Wolf Of All Streets Podcast Ft. Seth Ginns
Crypto is here to stay and understanding its superpower will give you a competitive advantage. Our guest Seth Ginns has been deeply involved with the crypto world since 2012. Now a Managing Partner at CoinFund, Seth specializes in liquid investment strategies and the convergence of crypto and equity markets. On this episode, Seth joins host Scott Melker to help us understand the recent infrastructure legislation and its effects on crypto, the upcoming election and what to expect in the stock market, why he believed in crypto early on, and why he continues to be a believer.
In this episode with Seth Ginns, we discussed:
CoinFund: a crypto investment firm
CoinFund vs other capital
Crypto: what drew Seth in?
How crypto built momentum
The ripple effects of the 2021 infrastructure bill
Crypto’s superpower
Why crypto is a competitive advantage
Luck favors the prepared mind: why Seth bet early on Coinbase
The Executive Order and a discussion of the crypto dip
The upcoming election and market predictions
Bitcoin’s role in inflation
The Anti-VC Movement
Cryptocurrency: risk or opportunity
Investments Seth is excited about
This episode is sponsored by: ARCULUS
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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.