The Wolf Den #47 - Bitcoin, Charts, Fear & Greed And More
Bitcoin Thoughts And Analysis
I largely missed the huge move up on Bitcoin as a trader - in fact, I had a small scalp short open at $7,720 before the move happened. I closed that short for a .5% portfolio loss at $7,800 after seeing $7,777 repeatedly attacked. A small loss, not a big deal. The bigger story is that I had closed my profitable longs at $7,777, expecting it to be major resistance, which it was.
What is important to understand about my trading style (you should know this already) is that I am NEVER net short. My portfolio is primarily Bitcoin holds - usually around 60-70% of my portfolio is investments. Even if I am short, I am always happy when Bitcoin rises, because I make more money.
At the moment it's hard to identify a brilliant trade idea. After a move like yesterday, it's wise for traders to take a deep breath, let things settle in and wait to see what the next move is likely to be.
CME GAP
The CME Gap that was the all the rage has finally filled. There is still another gap up above in the $11,000s. Gaps do not "need" to fill, but it is notable that this one is now out of the way. Bears will point to this as a reason that price went up - to fill the gap. I am sure they are still bearish now that it is over with, even though filling the gap does not mean we have to head back down.
I posted an article on trading gaps months ago in Cointelegraph, if you missed it.
MONTHLY CHART
Insanely bullish heading into the monthly close. As I have mentioned countless times, last month had the huge wick down which was a clear reversal for me. Now we have a potential bullish engulfing candle that has also flipped $6,540 and $7,777 to support. Rejected at an obvious level in the low $9,000s. No big deal.
DAILY CHART
Ugly potential candle, but meaningless with 8 hours left to go. Also, it is only an ugly candle if tomorrow is down. We do have a potential bearish SFP at the pink line - a wick above a previous swing high and close below, indicating a lot of liquidity for shorts in that area. I am still watching for a retest of that potential bullish breaker from two days ago. Price breached a supply area in a single candle, which should have held as resistance. It did not, so a retest would confirm a "bullish breaker." Very well may not retrace that far, but I have orders there.
RSI went extremely overbought everywhere, so a deep breath here is expected and needed.
This was my Ichimoku analysis from the free newsletter on April 21. I may have to start revisiting it more often. Bottom of the cloud held as support, bullish TK Cross and the Kijun was flipped to support. The Kijun was "the line" for BTC for years. You can click play on the chart to advance it.
"A look at the daily Ichimoku cloud offers quite a bit of information. The Kijun (brown line) has been one of the most significant support and resistance lines in the history of Bitcoin. Price is currently sitting directly on top of this line, holding it as support. The breakdown of the Kijun after Bitcoin’s all time high was one of the best indicators of the massive drop to come. The Tenkan (blue line) is currently offering resistance… but it did cross the Kijun bullishly, known as a bullish TK Cross just days ago.
Ichi traders would have expected the flat kumo top (cloud top) to hold as support, but that was not to be. That said, the bottom of the cloud is offering support on the past two candles, which leaves a lot of room for optimism. A break below the cloud (especially with it being red) would be bearish, and the cloud and TK would likely become resistance. At present, we would expect the Kijun and cloud bottom to hold as support, even if we see wicks below."
The Wolf Of All Streets Podcast Ft. Dr. Richard Melker
I interviewed my dad. It was an absolutely amazing experience.
While this may seem like a surprising choice, my father is one of the most interesting people that you could ever hope to meet. He is a world renowned ER Physician, who's accolades include 68 US patents for multiple devices that are still used every day to save lives, being the head doctor of the NASA Space Shuttle Program, proving that the Heimlich Maneuver was ineffective for drowning victims and much more.
We discussed the early days of emergency medicine, the Challenger Explosion, the politicization of COVID-19, life on the front lines in the ER during a global pandemic, fake news, inventing the transport ventilator, inventing the world standard device (The Melker Cricothyrotomy Set) for intubating patients in an emergency, the importance of hand washing, making the leap from physician to inventor, social distancing and much more.
Stablecoin Madness
This tweet is a bit of hopium, but the point is valid. Last week, I wrote an entire newsletter intro about stablecoins and their parabolic market cap. I do believe that this increase of stablecoins is bullish for the space - that's a ton of dry powder for a bull run, which we are likely seeing play out now. In 2019, stablecoins doublde in marketcap... that has happened again now.
Fear And Greed Index
People are finally over their "extreme fear" of Bitcoin. Now it's back to "fear." Great progress, I guess? Jokes aside, basing analysis on sentiment has been a good tool in the past. If people are still fearful after such a massive bull move, it means there could still be a lot more room to rise. We are presently at 44 on the scale.
Best Bitcoin Threads Continued
This is a great tweet, with tons of great Twitter threads to share with your family and friends who want to know more about Bitcoin.
Altcoins
Bitcoin made a truly bullish move yesterday, destroying it's alt pairs on the way. While this is painful if you are overexposed to alts, it's a great sign of a true bull move by Bitcoin, like the days of old. I closed most of my alt positions at a loss yesterday when Bitcoin went crazy - not the best scenario, but necessary to avoid more pain. I am also never really that exposed to alts, since my trading account is only 15% of my overall portfolio.
This is what I wrote on Tuesday - "I’m not seeing anything that’s screaming “buy now” or tremendous bullishness in the alt market today, but it’s worth keeping an eye on what’s happening." That proved to be correct.
For now, alts are almost all "falling knives" and dangerous to play in the short term. I have no idea if they have found the bottom yet, if they will bounce here and then drop, or if they are going to completely recover. No need to trade alts when Bitcoin is doing it's thing. Once Bitcoin settles, we will be able to really reevaluate the altcoin market and see how things look. It's hard to chart accurately with all of these huge red candles. Here are a few updates on some I have shared, since a lot of you are asking about these specifically. The others have basically broken down and become invalid, as happens when Bitcoin moves. Trade setups are just ideas.
AION/BTC
When Bitcoin started to move I quickly exited 50% of this position. As I mentioned the other day "my only concern is that it will come back down to test the descending line and stop me out while still remaining bullish. But no trade is a sure thing." That has happened. And that's why I exited quickly and kept half, so that I could afford to ride it a bit lower. Now my stop loss is below the blue channel. I am looking for this to retest that descending line. Hindsight is 20/20, but exiting the entire position around even would have likely been a better move for me here.
BAND/BTC
BAND/BTC
Wow. This one remains impressive. Held support at the previous all time high like a champ, even after the Bitcoin move. This could have more in store, although it just pumped again to hard to buy in this spot.
CELR/BTC
This is why you wait for confirmation to take a trade. I posted this as an idea, which has not played out yet. Still waiting to see if it does.
FTM/BTC
This one is really impressive. With all of that Bitcoin movement, it still held the top of the trading range as support.
LINK/BTC
As you know, I already thought this looked bad before the Bitcoin move, so no surprises here for me. I closed my short on this, since it was on the USD paid and Bitcoin was keeping it afloat. Small profit, nothing to write home about when all was said and done. You can se that price has broken down key levels and now is finding resistance at the demand zone I had drawn. This could reverse or at least find some relief. RSI is oversold on the daily, although it did not even manage a bullish divergence.
That said, this has fallen hard. If alts recover, I would expect LINK to lead the way as always.
MATIC/BTC
This has once again held ascending support! That has been the easiest trade in the world, over and over again as I have continued to point out. That's it, that's the update!
Chart Requests
AGI/BTC
I opened the chart and this was on it. Cool, the idea I had before basically played out. It did not quite reach the target, mostly because of Bitcoin. That said, this is presently holding support at 177. Bulls want to see that level hold. Otherwise, could be a trip to the all time low. Definitely don't want to see that break.
AYTU
This is trading in a large symmetrical triangle. You could argue that it is a bull pennant, although the flag pole is largely a huge gap. The 50 MA had a golden cross with the 200 MA on the daily not long ago, right before a major move up. While golden crosses tend to be lagging indicators, they are meaningful when they happen right at price. You can see that price was sitting on the 50 MA when it happened. Magic. For now, key levels are drawn in pink and a trader should look for a break of either blue trend line to indicate a choice of likely direction.
BBBY (BED, BATH AND BEYOND)
Bed, Bath just got Beyond rejected at the neckline of a potential inverse head and shoulders. A break of that line would have been a major bullish signal, but it was not to be as of yet. For now, this remains bearish to me below the black line at $7.31. The 50 MA (blue) also had a hand in the strong rejection.
BP (BRITISH PETROLEUM)
Good luck finding any logic in an oil chart - or in oil in general. Impossible to really glean much information from looking at this chart, but what jumped out to me are 2 clear rejections on the daily. One around the 50% retracement levels and the other yesterday at the 50 MA. A 50% retrace is common after such a strong move down, so to me this looks like more like a dead cat bounce than a reversal.
CITRIX
This looks decent. Nice movement up over the past few weeks on decent volume. Traveling in a slightly ascending channel, which is fine. Price has seemingly just retested the bottom as support. The black line looks like it should be retested to me, as it's also in confluence with the daily pivot (P). I would expect this to at least hit the R1 pivot on the upside, maybe in confluence with the top of the channel. I put a little circle to show the idea, although I would never predict the timing. For now there's reason to be optimism here. $130.55 would be a cool entry if it drops.
DGB/BTC
DGB has arguably gone parabolic like days of old. This is an old chart, I did not even update the key levels as they are somewhat clear. For now 173 looks like a key area.
Zooming into the 4 hour gives a bit more clarity. Bulls wants to see the ascending support hold and want to see the descending resistance broken to signal that continuation up is likely.
HBAR/BTC
No updates to the levels on this chart - no need. You can see that price has presently bounced from a key support level, at 383. It appears it hit that level to the sat. If it holds, this would be a nice area to enter as a bottom. That said, a break below it and retest as resistance should send price down to the next level. Daily RSI is oversold, which could be a sign that it's ready for some relief, but RSI is a bit of a meme on alt coins when Bitcoin is behaving in this manner.
HIVE/BTC
We have almost no price history for this pair - in fact, I had to use an hourly chart, so it's impossible to read very deeply into this. For now, I can identify 2 horizontal levels and a descending wedge - which price is currently attempting to break out from. That said, hard to trade this with any confidence when the chart is so new.
IOST/BTC
Ugly chart. Price clearly broke support (for now, daily candle is not closed!) at 45. Bulls wants to see the candle close above that level. Price is trading in a range, with a bottom at the all time low. If price fails to flip 45, technically we should see a move to the bottom of the range to retest that low. Does not HAVE to happen by any stretch. You can see that price has been trading in the bottom half of the range, so it remains ugly under the EQ (the center dashed line). The first sign that this could reverse and go back up would likely be a break of the descending blue line that has been formed as resistance in the range.
KNC/BTC
Holding 7450 on the drop is a positive sign. Looking at the daily pivots, you can see that price was rejected exactly at the R1 and is now struggling with P. Pivots are a very cool indicator, because they are based on math - they are not arbitrary levels. Hard to predict where this is headed, because it had a nice move up and was consolidating bullishly before Bitcoin pumped. This did look good before that move, so if Bitcoin chills, I would lean bullish.
KNC/USD
Limited information because it was not listed long ago. That said, it appears price is forming a bull pennant after a sizable move up. Today's candle is being used as a touch on the top, which means it is unconfirmed until the close. Still, the 2 key levels are marked - the bottom black line being in perfect confluence with the daily pivot. I would expect good thing from this pair based on what we are seeing here.
NEO/BTC
This is sitting on a key a support at 1022. You can se that this is a first retest of the top of an old trading range, represented by the blue box. Failure to hold the current level would likely send price down to the EQ (middle) or bottom of this range, which would also be a retest of all time lows. Bulls want to see this hold the current level. You can see that the local uptrend was broken when price dropped below the red line.
NPXS/USDT
I am quite sure that I will never make any sense of this coin. It had such fundamental promise and the charts looked great over and over again before breaking down. Even the huge Bitcoin move yesterday did not really help the USDT pair much, as it's trading at 1 SAT against Bitcoin. Awful. This channel is so/so, I don't love it honestly. I usually like to start a pattern at the beginning of the move, and the start of this channel looks a bit arbitrary, although it is technically valid. Regardless, under 1269 there is nothing to even consider here.
OGN/USDT
Touch chart to figure out, very sporadic movement. I like VPVR on this chart, because it clearly shows that price is at a key area of support with regards to volume. The POC (Point of Control, blue line) is support price here with major volume nodes on the right. That said, I would like to see price well above that line and those nodes, as well as above the dashed center line of this channel. I don't love the channel, because it ignores the major wick down at the beginning of the move, but there were no really clear patterns to draw.
PHB/BTC
I have good news and I have bad news. The good news is that this broke from a descending wedge not so long ago. The bad news is that it did it on almost no volume and it seemed like a meaningless breakout. The worse news is that, due to Bitcoin, this is now in all time low discovery. This needs to flip 24 back to support to even be considered. If that happens and Bitcoin behaves, this could be a bottom. That's a lot to ask. For now I am staying away.
RSR/BTC
RSR has been riding this trend line down like a slide at the county fair. Not a good looking chart at the moment, like every alt. 2600 looks like a likely stop for this - if you are into catching knives, that could be a place to attempt a buy. Personally, I see not reason to trade this right now.
SPCE (VIRGIN GALACTIC)
Today's candle close could be meaningful. At present, it looks like the ascending wedge is likely to break down and that price should continue to $12.93 at least. Bulls want to see ascending support recapture, because this looks like a bearish retest of that support as resistance. Key levels are marked, so trading between the black lines it a bit tough for me.
SXP/BTC
This chart is a bit of a meme. No price history, no volume. Even on the 4 hour here, there are gaps all over the chart. I drew a few levels. For now it seems to be breaking down and continuing a down trend, but it's impossible to make any confident assertions based on the limited time this has been trading. Maybe in a few weeks we can take a better look.
TTWO (TAKE TWO INTERACTIVE)
This did what it looked like it would do from last time I looked at it - it hit that resistance at $128.05, which would have been the target of a long trade there. Price fell from there and now has flipped the 200 MA to resistance. I do not like the strong rejected here at that 128 level - would have liked to see more bullish consolidation beneath it. From a chart perspective, this could drop more for sure. If you are trading it, think about waiting for at least a flip of the 200 MA back to support.
UBT/BTC
Limited information on low volume on a questionable exchange. Hard to really offer anything on this one, but I will try. It appears price is in an ascending channel. Support and resistance marked with blue lines. Right now, price is retesting the EQ (equilibrium, center line) of the channel, so bulls want to see that area defended as support.
VET/USDT
VET/USDT made a really nice move after breaking descending support. It also cleared a few of the higher volume nodes on the VPVR, as seen on the right. That said, last time I analyzed this, I said that the blue box would likely be strong resistance, and that is where the buck stopped. At this point, I would want to see price price above that blue box as a flip to support. You can see that the POC of the VPVR (blue line) is still overhead, with tons of likely sell orders up there.
WLL (WHITING PETROLEUM)
Oil is ridiculous. No idea really how to look at these charts or analyze it fundamentally of late. This, like all oil companies, has been trending down since 2014. At present, it could be making a bull pennant after a nice move up on volume. It has also flipped the 50 MA to support, which is encouraging. Still, hard for me to buy into oil at the moment. Fib levels shown can be used as targets for further movement up, if it happens.
XAG (SILVER)
I shared this a few weeks back and am still long silver. As long as it holds the green channel, I am bullish. I love the breakout from the black line and retest with the wick, which still closed the candle in the range.
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.