The Wolf Den #469 - Welcome To Our New Sponsor - BITGET!
Bitcoin Thoughts And Analysis
WEEKLY CHART
The Bitcoin weekly chart continues to show us the clear areas of interest. As expected, we have now seen the retest of the 50 MA and key area at $45,500 as support. We've been watching for this - now we need to see it hold! The weekly close will be very interesting and key to determining direction.
DAILY CHART
There you have it. Price dipped into the key zone of support and pierced the bottom. As discussed, when everyone is watching a level, you rarely hit it exactly - either price bounces above or dives right through. Either way, we now have the retest that we have been watching for, following the idea that I and many others drew. The target of the confirmed ascending triangle remains, shown by red and based on the depth of the pattern.
Of course, patterns are just ideas, even when confirmed. TA is art, not science.
4-HOUR CHART
Bitcoin has officially made a very quick trip from overbought, all of the way to oversold. The bearish divergence on the 6-hour chart with overbought RSI was the leading indicator this time, although it was not seen on the 4-hour. the daily also hit overbought for the first time in ages.
Now that we are oversold, I am looking for price to either continue up or come down for one more dip and create a bullish divergence - my favorite trade and bottom signal. This would require a higher low on RSI and a lower low on price - the idea is drawn above. I have shared these tens of times with you and they have an extremely high hit rate.
I will be watching.
Altcoin Charts
Is it exercise coin season? We had DeFi summer in 2020, NFT summer in 2021 and Metaverse Fall in 2021, so I guess we are in need of a fresh category?
In true crypto fashion, a new genre of coins has emerged and are all irrationally pumping for no explainable reason. Led by STEPN (GMT), everything with an exercise component that I have looked at seems to be absolutely flying. I am NOT TELLING YOU TO BUY THESE COINS. In fact, I would recommend avoiding these irrational fomo moves in general. I am merely pointing out the absurdity of crypto and how projects that have bled in the past can pull many multiples over night.
Some of this is likely fundamentally driven. I have had multiple people tell me that they actually use STEPN and dotmoovs has had a number of the world's biggest footballers involved. There is real utility for crypto in exercise tracking and apps which is an area I have small exposure to as an investor. Ok, great.
But that does not explain this insane price action, which is clearly people FOMOing in because they think they can make money.
Here are the absolutely absurd charts for 3 of them - STEPN (GMTUSDT), dotmoovs (MOOVUSDT) and Digital Fitness (DEFITUSDT). I own these 3, so I happened to check the charts when the alarms went off. There are likely others out there that I have not even seen.
Welcome to crypto.
Now moving on to more serious and important subjects...
BITCOIN DOMINANCE
Charting Bitcoin Dominance is a bit of a meme, because support and resistance are created by traders placing orders and this is not a tradable asset.
That said, looking at the chart can give us a visualization of what is happening, and it is VERY interesting.
Bitcoin Dominance dropped massively on the Bitcoin dump. That's actually a sign of strength across the market. Usually when Bitcoin drops, altcoins drop harder. Instead, they performed better than Bitcoin on the retracement.
Bitcoin Dominance ALSO DROPPED when Bitcoin was going up recently! Usually on a strong Bitcoin move up, we see Dominance rise with it as people sell their alts to get into Bitcoin. Bitcoin pairs suffer while USDT pairs tread water.
Altcoins are clearly outperforming Bitcoin at the moment - in both directions. This is not something that we see often and is worth tracking.
AXS/USDT
I was hesitant to share this chart and it is not something I own or am currently trading (I have enough alt exposure). AXS was effected by the Ronin Bridge hack, so there are some real reasons to consider avoiding this ecosystem altogether.
That said, Sky Mavis is refunding anyone affected and nothing has fundamentally changed about Axie Infinity, which made a huge move right before the news, breaking through the key blue resistance with major volume and power.
Sometimes the FUD is a great opportunity to buy a dip that you would otherwise not have seen. Solana had the Wormhole hack and has performed exceptionally well since. This could be a similar case.
We have a clear bull flag forming, with price bouncing off of support at $61.32. Buying that support is one strategy. Buying a breakout of the flag top is another. It depends on how you trade.
Either way, we have a significant breakout (blue line) on volume, a huge move, and bullish consolidation into support. Take the hack and news out of it and this is a good looking chart.
FTM/USDT
Another coin I was hesitant to share and it is also not something I own or am currently trading (I have enough alt exposure).
Fantom suffered a major hit when Andre Cronje et al announced their departure from DeFi and the FTM ecosystem. These are valid reasons for a drop and to be cautious.
That said, FTM has bounced beautifully off of the lows and is working on a potential breakout through a key resistance, the descending blue line. This is AT RESISTANCE AND IS NOT A TRADE at the moment. You are looking for a break of the blue line on increased volume (which we have right now) and a close above. Then you can either wait for a retest as support (which may not happen), buy the breakout (riskier). $1.4885 is the key horiztonal level here, so you can also buy a retest of that area as support.
April Fools' Jokes Incoming!
Every year, the crypto community pushes the bar on April Fools jokes a little further than the previous year. Last year, Twitter was inundated with ridiculous jokes and it was nearly impossible to what was real and what was fake. My two favorite jokes last year were Peter Schiff admitting he was wrong about Bitcoin and Litecoin rebranding itself to BitcoinLite. The Litecoin joke was so believable that for a short amount of time, it was commonly accepted and the price shot up. Please think twice before believing any outlandish headlines today or you run the risk of becoming a meme.
Citi Is Bullish On The Metaverse
Citigroup just hit a home run in the metaverse reporting game. They released a 184-page research report demystifying this new virtual economy. To call them bullish is an understatement: “the Metaverse could be between $8 trillion and $13 trillion by 2030, with total Metaverse users numbering around five billion.”
One of the common trends throughout the report is that nobody can offer a cohesive or clear vision of what the metaverse will be. Like trying to understand the internet before the 90s, everyone has an idea but nobody can predict the outcome. I am only 20 pages into the dense report, but there are a few quotes that stuck out.
“Just like in 1993 we couldn’t tell how big (the internet) was and what it was exactly, this thing we are calling the Metaverse is a continuation of that…it is going to be bigger than anything we have ever known.”
"The Metaverse is partly a dream of the future of the internet and partly a way to encapsulate current trends in online infrastructure, including the growth of real-time 3D worlds."
"The Metaverse is not a destination, but rather a point-in-time. Just as singularity is the point in time where artificial intelligence surpasses human intelligence, the Metaverse is a point in time where people value digital assets more than physical assets. You can broaden that to digital experiences and digital relationships as well."
Regulators In The EU Back Impossible Rules
The EU has passed a ridiculous law that will force exchanges and individuals to submit KYC information on transactions of $1000 euros or more.
Absurd, impossible and offensive.
Imagine going to an expensive dinner and show with a friend. You owe them $1200 after the night is over and send them the funds via Venmo. Now imagine that you have broken the law because you did not scan their ID, gather their social security card and information and submit it to the proper authorities.
That's what is happening here, but only for crypto users. The law is discriminatory and unenforceable and could make it impossible for exchanges to operate in the EU.
I am sure there will be push back and that people will fight. Let's see if we can get this law chaned.
Brian Armstrong summed the decision up well:"it's anti-innovation, anti-privacy, and anti-law enforcement."
The Miami Bitcoin Conference Is Here
The crypto market is at a pivotal point right now, having bounced hard off the bottoms but still teetering on the edge of further correction. A few strong announcements from the conference would be a great way to solidify a turnaround, although we have seen prices drop during these events in the past.
I will be a part of the official news desk at the conference and will be shooting constant podcasts and interviews throughout. I can't wait to see what big announcements are coming!
US Lawsuit Against Binance Dismissed
One small step for Binance, one giant leap for the crypto industry,
Not really, but I wanted to use the quote from the moonlanding.
This is not a huge step, as it was effectively a class action suit of disgruntled Americans attempting to blame Binance for their own poor financial decisions. "WE DIDN'T KNOW THE RISKS OF CRYPTO WHEN WE USED A VPN TO LOG INTO A FOREIGN EXCHANGE AND TRADE SHIT COINS!!!!"
Nice to see this stupid case thrown out.
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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.