The Wolf Den #462 - Technical Analysis Is Not A Crystal Ball
Bitcoin Thoughts And Analysis
Bitcoin has been pushing up, finally breaking above $42,000 once again. It made a quick move above $43,000 before being swiftly rejected and dropping back to $42,000 where the pump started. Classic.
A Bitcoin whale closed a massive short just moments before this move, which certainly makes it smell fishy (no pun intended, whales are mammals anyway).
We have seen a lot of moves like this of late - huge wicks up and quick rejection. Now we watch to see if that was a bull trap or if bulls were "clearing the runway" for more action to the upside.
Let's look at the charts.
WEEKLY CHART
It is only Tuesday, so there's nothing to see on the weekly chart. We want to see the week continue to press upwards and ideally close above $42K - and $45.5 K, where the 50 MA also now currently resides. Strong resistance.
This week has now traded higher than the previous two weeks, a good sign after this wicks to the upside.
DAILY CHART
Bitcoin continue to consolidate towards $45,500, making higher lows towards a flat top. This looks like an ascending triangle, but is irrelevant unless price breaks the neck line.
Either way, the series of higher lows is encouraging - it means that sellers have had less strength on each push down and that buyers are interested at those levels.
Price broke the centerline of the Bollinger Bands a few days ago and has continued to trade above, testing the upper band as resistance on the move up today. The bands continue to tighten, which indicates that more volatility is likely coming soon.
4-HOUR CHART
We have had quite a few shooting star candles on the 4-hour chart, which are bearish or bullish depending on context. The first two played out as they should - signals that the market was topping and that bears found liquidity for a move down. These candle were confirmed later with down candles that ultimately showed a market top. The third example ended up being bullish. As you can see, there were no blue candles following, so it was never confirmed. It ended up being a "clearing of the runway" by bulls.
It remains to be seen what will happen today. The first instinct for any trader would be caution seeing that candle after a move up. Bulls want to "fill that wick" and continue up.
The move up left potential bearish divergence on multiple time frames with RSI (not shown). I will comment further if we see confirmation.
Bottom line - the move up is encouraging, but proceed with caution after the rejection.
Altcoin Charts
DOT/USDT
This is the continuation of an idea that I shared recently. Price broke out through the blue line and retested it as support, in confluence with the top of the blue support zone. $19.66 is a key resistance and price is currently attempting to push through. The simple target is $22-$23, although this will go much higher if altcoins rise en masse. The break through the blue line would technically have a target of the top of the blue line, around $55.
$19.66 is NOT BROKEN YET. It remains resistance until the candle closes above, for me on the daily chart. The way to trade this with confirmation is a retest of the area as support.
Key levels are marked.
I am not looking to trade DOT, but own the coin, earning 12% interest holding it.
India Will Not Count Losses
Brutal.
In most countries, capital gains losses can be used to offset gains, bringing down the total owed in taxes. The final number an investor is on the hook for is determined by the total amount earned in a calendar year.
India has a different plan. "India’s government plans to collect a 30% tax on profits generated from every coin, instead of letting investors use the profits to set off losses accrued from another token."
Investors and traders will need to handle each asset individually, without the benefit of counting their losses against their final tax bill.
This is crap.
Bored Ape DJ Duo Signs With WME
Cool. As many of you know, I spent the first 20 years of my career as a DJ and music producer, so I take a particular interest in the intersection between music and crypto.
One of the unique features that make Bored Apes appealing is that owners also control the IP (intellectual property). They can do whatever they want with the likeness of their ape and keep the profits.
In this case, a DJ duo called ESCAPΞPLAN has been signed by a huge agency (WME) and is already booked for a club residency. They're producing music with huge names, their videos are animated, and they will somehow play "live" with their NFTs, completely anonymously.
Just another way that crypto is going mainstream.
Goldman Sachs Executes First OTC Options Trade
Goldman partnered with Galaxy Digital to make their first Bitcoin options trade. This is a marriage made in heaven. Mike Novogratz, founder of Galaxy, was a partner at Goldman before making the move into crypto.
Quick details from the article:
Goldman Sachs initiates its first bitcoin options trade with the help of Galaxy Digital.
The options trade was a non-deliverable, over-the-counter contract that allows the purchaser to cash-settle for price volatility in bitcoin.
Galaxy Digital and Goldman Sachs have a history of working together and it seems this relationship has more to come.
The chasm between Wall Street and crypto is rapidly closing. It gets no bigger than Goldman Sachs.
The Wolf Of All Streets Podcast Ft. Ari Meilich
Is the play-to-earn model the next big thing in gaming? Founder of Big Time Studios and Co-Founder of Decentraland, Ari Meilich (@arimeilich), joins us to discuss the metaverse and his new multiplayer adventure game. With Axie Infinity disrupting the player-owned economy, the future is quickly being rewritten. On this episode of The Wolf Of All Streets, we take a look at how far the metaverse has come, where it’s going, the future of play-to-earn, and the biggest challenges Ari has faced in building a blockchain-integrated game.
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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.