The Wolf Den #464 - The Merge
Bitcoin Thoughts And Analysis
WEEKLY CHART
When in doubt, zoom out. The key levels for Bitcoin have not changed in ages, so it's easy to gauge where we are.
4-HOUR CHART
Bitcoin recently hit overbought on the 4-hour chart, making the predictable trip from oversold. Now we have potential bearish divergence, coming out of overbought RSI, which is a major red flag for me. Again, it is NOT CONFIRMED. Confirmation would come in the form of a clear elbow down on RSI, which is there at present with almost 2 hours left in the candle. If this confirms, the expectation would be an eventual trip back to oversold and a bit of retracement. That said, we would watch for hidden bullish divergence to form and effectively cancel the bear div.
We want to see a major push up today on decent volume to plough through these potential bearish signals.
Here is the zoomed out chart, showing the recent bottom with bullish divergence and oversold RSI.
Altcoin Charts
EGLD/USDT
Elrond has been on a quiet run over the past 10 days, increasing by roughly 50% in value. As you likely know, I am a long term Elrond holder and this is not an asset that I trade aggressively at this point. I first shared in the newsletter when this when it was ERD and at 15 sats. It ran to 300 sats (20x) and then switched names to EGLD. We started trading EGLD here at below $10 and it went to over $500, another 50X.
This is about to hit overbought and is running into resistance, so I do not view this as actionable at this moment. That said, a break of the blue line on increasing volume would be a signal that EGLD is ready to run hard, with a target of the all time high.
Key levels are marked. If altcoins start to really run here, this could be a big winner. That's a BIG IF. Bitcoin and macro can ruin the party in an instant.
MATIC/USDT
MATIC appears to be ready to go for a run, although we need to see confirmation of the breakout in the form of a candle close above the blue descending resistance. This candle could easily close back below resistance and be a fake out, so I personally would wait a bit. The 50 MA is also currently acting as resistance, so the safest play would be a buy after a candle close above that line.
MATIC is another long term investment for me. If you have been a subscriber, you likely bought at around 5 cents.
This is a compelling setup if we get confirmation... and volume. Any breakout without volume is suspect, so be careful.
SOL/USDT
If you watched yesterday's live stream, then you know we were looking for this move from Solana. Price was trading in a descending wedge, which means that the target is roughly the top of that wedge - $121.93.
We also had bullish divergence with RSI (also before the one shown) that signaled a likely bottom was in.
This appears to be a confirmed breakout and retest of the blue line, so this has technically triggered.
I bought SOL over the past few months from $116 down to $80, and do not intend to trade this or add to the position at this time.
On-Chain Data Shows Traders Buying The Dip - IntoTheBlock
The Wolf Den On-chain Analysis March 24, 2022
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.
On-Chain Data Shows Traders Buying The Dip
Analyzing blockchain data, we are able to gauge the amount of traders profiting from their positions at a given point. Through IntoTheBlock’s In/Out of the Money indicators, addresses are classified as “in” or “out of the money” depending on if they are profiting or not, comparing the current price to their average cost.
By tracking how profitability levels vary over time, we can determine how the market is adjusting their positions. In this case, if we compare the amount of Bitcoin addresses in the money now versus the last time prices were at the same level, we can infer that holders bought the dip.
ITB’s Bitcoin financial indicators
At a price of $42,000 there are now 640,000 more addresses making profits. This suggests that a high proportion of the addresses that were at a loss last time prices were at this level decided to double down on Bitcoin at lower prices as well as new players buying.
This trend appears to have continued in the past weeks regardless of the macro uncertainty, as evidenced by the number of addresses with a holding period of under 30 days — classified as Traders by IntoTheBlock — increasing throughout March.
ITB’s Bitcoin ownership indicators
Bouncing back from yearly lows, the number of Traders has jumped back to 3.28 million addresses. This suggests that a large amount of retail traders have been entering into Bitcoin in the recent run-up.
Use This Tool To Monitor Ethereum
track ETH become ultra sound money
I love this free tool, which I use to track Ethereum's progress. On this tracker, you can watch what projects/platforms/functions are burning the most Ethereum, alongside burn totals since EIP-1559. There is also a "simulate merge" function that allows users to see projections pre and post-merge. One of the newest features near the bottom is an "annualized profits price model." Essentially, you can see how Ethereum's future price and growth shape up against the profits of major companies.
Epic Live Stream
I have started hosting a round table on YouTube every Thursday with the most brilliant minds in the industry. Today's panel includes Raoul Pal, Jeff Dorman (Arca), Josh Frank (The Tie) and Pierce Crosby (TradingView)... and maybe some surprise guests. You really don't want to miss it. 9:30 AM EST.
Why Is Everyone Talking About Luna?
Luna, the 8th largest cryptocurrency by market cap has garnered a metric ton of attention over the past few weeks. Aside from the coin recovering to all-time high territory, the founder Do Kwan has become a bonafide crypto celebrity.
A major question around any stable coin is how the reserves are structured. This question has caused endless controversy and remains a hot topic. Do Kwan recently announced that UST’s reserve would be supplemented by Bitcoin - a promise of “$10B+” to be exact. The strategy is great for PR, great for Bitcoin and Luna, and competition for Michael Saylor. MicroStrategy currently owns $5.9B worth of Bitcoin. Who would have thought that Luna could soon pass that number?
Bitcoin Bonds Projected To Be Oversubscribed
The delay of the Bitcoin Bonds is bad news, but there's a silver lining. According to El Salvador’s finance minister Alejandro Zelaya, "the bids for the bonds amounted to $1.5B," meaning there was a 50% oversubscription.
El Salvador is likely in a tough spot right now. As the whole world watches and demand is high, the country has to balance legitimate macro concerns that could collapse the entire plan. We all know Bitcoin is capable of big swings and a badly timed dump could spell disaster for newly released bonds.
The Wolf Of All Streets Podcast Ft. Dan Jeffries
How does crypto shape our future? It might influence everything from government to banking. On this episode of The Wolf Of All Streets, Dan Jeffries (@Dan_Jeffries1) — author, futurist, systems architect and thinker — explores the power of crypto, and its potential dark side. Dan and host Scott discuss the importance of cryptocurrencies, how crypto technology has challenged the nature of money, and why blockchain technologies are here to stay.
In this episode with Dan Jeffries, we discussed:
Meet our guest Dan Jeffries
We’re living in a simulation
Why cryptocurrency is important
Addressing privacy concerns
DAO driven government
The bipolarity of centralization and decentralization
It’s 2031. This is the world that Crypto created.
Will banks become obsolete?
The evolution of technology
The future of free time
Why you shouldn’t worry about super intelligence
A new species of robotic humans
NFTs and the metaverse: what will stick
Why blockchain technology is here to stay
Follow Dan Jeffries
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.