The Wolf Den #465 - The Knowns And Unknowns
Bitcoin Thoughts And Analysis
WEEKLY CHART
The weekly chart continues to look bullish, but it is too early to judge the current candle. The past two weeks have thus far filled the wicks from the previous few weeks, showing that those were likely "test pumps" and not bears advancing price down lower. There is strong resistance ahead near $45,500 - both the 50 MA and a key horizontal level.
Don't get too bullish at resistance! Be patient.
DAILY CHART
I often talk about the idea that traders should not fixate on lines, but rather view them as areas of interest. To that end. I have redrawn the top of this potential ascending triangle as a zone, rather than an exact line. As you can see, price continues to make higher lows, consolidating towards this flat zone. This usually means that buying pressure is increasing and that the flat top will eventually break. Almost every time frame has a confluence of resistance in this area.
This will be an interesting weekend.
Altcoin Charts
LTC/USD
Litecoin is in an interesting spot here. As you can see on the left of the chart, we traded the descending blue wedge from roughly the current price to the blue supply zone around $300. This was shared in the newsletter, closed and considered a successful setup.
We have something similar potentially happening now, although the market is shaky and very hard to trade.
Depending on how you draw the descending blue line, price has either broken out or is at resistance. For me, I would prefer to buy a retest of the $116 area as support and then see a clean break out on volume. Does this mean you might miss the trade? Sure! But who cares? There's always something else. It could break out here and go straight up. It could also test $116 and fail - but at least you would have a tight stop in place and take a small loss.
This entire move was preceded by consistent bullish divergence with RSI. It has not yet hit overbought, so I think it could have another solid push. The immediate target is simply $144. You can reassess if it gets there.
Remember, when I draw a line it DOES NOT MEAN IT WILL HAPPEN. It's merely my loose ideas of what I would want to see to take action.
Metal Seed Phrases
Being your own bank isn't easy and requires a high degree of responsibility and diligence.
Paper used to be the main method of seed phrase storage, but seed phrases can burn in fires or damaged in a flood. It's paper, after all.
Making multiple copies is a suboptimal solution to this problem, because it increases your chances of being compromised.
As of right now, some of the best solutions are based in metal. You simply order a blank piece of metal created for this exact use and physically enter in your keys. Google search "metal seed phrase," if this interests you.
The Future Is Bright - Must Watch
Yesterday's weekly roundtable was a mind melter. I highly suggest that you watch the final 30 minutes, when I sat aside in awe of Raoul Pal (Real Vision) and Jeff Dorman (Arca) as they riffed on the future of digital assets and the coming impact of the technology on every aspect of our financial lives.
I was so inspired that we are editing this into a podcast episode, to make sure that it is shared far and wide on multiple platforms.
Wait until you hear about "universal basic equity" and DisneyCoin...
Exxon Mining Bitcoin With Excess Gas
Exxon has quietly been running a pilot program in North Dakota, converting flared and wasted gas to energy for Bitcoin mining. Apparently it has been successful, as they are considering taking this program to four countries and massively expanding.
This is huge.
They are taking wasted gas and energy and using it mine Bitcoin.
"Denver-based Crusoe helps those companies capture otherwise wasted surplus gas from their energy production, convert it into electricity, and use it to power data centers and bitcoin mining operations. The firm estimates that bitcoin mining allows carbon dioxide-equivalent emissions by over 60% compared to routine flaring.
President of environmental shareholder-activist group As You Sow, Danielle Fugere, told Bloomberg that these pilots are a positive step for Exxon to find a use for its excess gas. “It is creating use of what would be otherwise wasted,” she said.
The energy debate will die.
Russia To Accept Bitcoin For Oil?
Anything goes in the world of Bitcoin. Russia is floating the idea of accepting Bitcoin for oil. I know Bitcoin tends to receive a lot of FUD from regulators and that this will only contribute further to the idea that Bitcoin can be used to circumvent sanctions, but once you understand it to be a currency like any other, it makes perfect sense.
This is what a deputy in the United Russian party had to say. “If they want to buy, let them pay either in hard currency, and this is gold for us, or pay as it is convenient for us. The set of currencies can be different, and this is normal practice, [so] you can also trade bitcoins. We can sell gas to the West for rubles and gold, and to "friendly" countries such as China or Turkey for either national currency or Bitcoins.”
A the end of the day, Bitcoin should just be treated as technology - totally agnostic. It’s hard to find anyone today that believes the internet shouldn't be accessible to anyone who wants to use it. Bitcoin should be viewed in the same manner.
Bank Leumi To Offer Crypto Trading
The second largest bank in Israel will allow customers to trade and custody Bitcoin and Ethereum. This is being made possible through a partnership with Paxos.
Buckle up, these services are inevitable from most of the world's banks. The people want crypto.
XCOPY Sells $23M In NFTS... In Ten Minutes
One of the world's most prominent NFT artists just hit pay dirt. His piece of digital art entitled "Max Pain" sold 7294 editions in ten minutes at $3,100 each. That's $23M worth in 10 minutes.
This is proof that there is serious demand for art from creators at the high end, and that the NFT art space is going nowhere.
Digital Assets Bill, Coming Soon To A Country Near You
Community favorite Cynthia Lummis and colleague Kristen Gillibrand are drafting legislation surrounding digital assets. The bill will focus on banking, taxes, privacy, and consumer protection issues.
There will be far more to report when the details become clear, but we are likely in good hands with reasonable legislation incoming. Regulation is inevitable, so better to have advocates taking the wheel.
I can guarantee that we will disagree with much of what is drafted, but any true compromise leaves both sides wanting.
Notable, Lummis is a Republican and Gillibrand is a Democrat. Bipartisan support is key.
My Recommended Platforms And Tools
This is where I trade with leverage and can also trade spot with no fees.
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Rewards Code: WOLF25
Mining for everyone! You can buy an ASIC and have it set up at a destination of your choice by them, and you only pay the electricity cost. Absolutely awesome.
I use RoundlyX to buy small amounts of Bitcoin every single day. They automatically round up my credit card purchases (with 10x multiplier) and invest them in crypto. Absolutely brilliant. Passively invest money you don’t need without a thought. Further, they have integrated with Voyager (see above) to offer commission-free purchases.
Rewards Code: WOLF
Concierge Phone Service for Americans that protects your from SIM Swaps and other phone related hacks. I cannot stress enough how amazing this service is.
Subscribe to my YouTube channel for free daily content.
Follow me on Twitter at @scottmelker. This is where I am constantly updating my trades and sharing ideas.
On-chain and fundamental analysis, research, predictions and indicators, all in one place. Highly recommend.
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.