The Wolf Den #57 - Bitcoin, Chart Requests, Ross Ulbricht and More
Bitcoin
I stopped out on my short from earlier in the week and quickly closed another that I attempted this morning for a small loss. The chart looks more bullish than bearish at the moment, although I would not be surprised to see it drop again from this general area. For now, I am happily on the sidelines, watching my long term portfolio rise.
I should once again remind you - I ONLY SHORT AS A HEDGE against my holdings. Losing on a short for me is actually profitable, because my portfolio rises disproportionately. I am always cheering for Bitcoin's price to rise.
Revisit my analysis on volume from Tuesday. As I mentioned, volume was clearly decreasing with each drop in price - a very good sign that this was consolidation and not a renewed downtrend. Today's volume looks like it will increase significantly.
MONTHLY CHART
Bulls really want to close the month above $9243. That's it.
WEEKLY CHART
The 50 MA is doing it's magic, supporting a 4th candle in a row. Need to wait and see how the week closes, but very encouraging.
DAILY CHART
I guess I should have trusted that hidden bullish divergence on the daily chart!
4-HOUR CHART
This is a beautiful channel. I was unwise to attempt shorting after the clear bounce from the bottom. My short this morning was around the channel top and I took a tiny loss quickly when I realized it was going to keep pushing.
The 50 MA on the 4-hour has proved to be essential once again - I will definitely be keeping that one on my charts for the foreseeable future. If Bitcoin can hold above this channel, we should see continued movement up. Volume also looks like it's rising a bit.
The Wolf Of All Streets Podcast Ft. Lyn Ulbricht
This is a special and important episode. I had the opportunity to speak with Lyn Ulbricht, mother of controversial Silk Road founder Ross Ulbricht who is currently serving 2 consecutive life sentences plus 40 years for his role in the Silk Road. Whichever side of the fence you stand on, hearing his mother talk about the gross injustice in his sentencing, the effect on her family and the defective criminal justice system will likely stir your emotions. I truly believe you need to listen to this episode. If you are moved by the story, please sign the petition below in an attempt to convince the President to grant Ross clemency.
Monopoly Money > Fiat
What an absolutely brilliant tweet. The chart is really interesting - being able to visualize inflation and the dramatic reduction in purchasing power for the US Dollar is an eye opener. This is especially true when you consider that the dollar is the "strongest" currency in the world. Dare I say, buy Bitcoin?
Millennials Are The Unluckiest Generation In History
They've had the worst economic luck in U.S. history. many Millennials will never recover.
"After accounting for the present crisis, the average millennial has experienced slower economic growth since entering the workforce than any other generation in U.S. history.
Millennials will bear these economic scars the rest of their lives, in the form of lower earnings, lower wealth and delayed milestones, such as homeownership."
It sucks to be a Millennial. Those of you who are a part of this generation have gotten the short end of the stick repeatedly, entering the work force during the Great Recession (or even after 9/11), never recovering, and walking headlong into the wall that is the coronavirus crisis. Millennials have been disproportionately effected by the COVID-19 pandemic as well.
"At the beginning of 2019, millennials became the largest generation in the U.S. full-time workforce, surpassing Gen X. But the coronavirus crisis walloped millennials so disproportionately that they’re probably giving the top generational spot back to Gen X in the next month or two."
Millennials get a terrible wrap - the truth is, they really never had a chance.
Hertz Pays Bonuses, Declares Bankruptcy
This should be illegal. This is wrong. This is infuriating.
Hertz paid out their retention bonuses to senior managers and executives, knowing that they were going to declare bankruptcy and seek protection just days later. I am not sure how this is legal, it definitely is not moral and they should be absolutely destroyed by the public for this behavior. I strongly suggest you consider using another rental car agency when things get back to normal - Hertz has lost the benefit of the doubt.
Goldman Sachs Client Call On Bitcoin
Yesterday I took one for the team and suffered through the Goldman Sachs call on Inflation, Gold and Bitcoin. Spoiler - it was bad. I have attached the call notes, which summarize everything there is to know quite succinctly. It's a very interesting read and I encourage you to go through it a few times.
Here is the quick and dirty:
Fed = brilliant
Dollar = perfect
Inflation = not worried
Depression = economy has bottomed, no depression
Gold = bad
Bitcoin = bad and for criminals
Predictable. They were toeing the line for the government. A few key takeaways for me:
There is enough interest among their clients that they had to dedicate a portion of a call to discussing Bitcoin. Regardless of their position (which is predictable), it means they are being asked. Further, we have seen this behavior before with other banks. Remember when Jamie Dimon of JPMorgan called Bitcoin a "fraud" and "worse than tulip bulbs?" and then moved to launch a JPMorgan crypto?
Remember when he said he regretted calling bitcoin a fraud and believed in the tech?
Don't listen to what they say. Watch what they do. I would not be surprised of Goldman is exposed to Bitcoin - they openly started a trading desk in 2017 which mysteriously was never mentioned again.
Also, they were extremely vague on their predictions for the virus and the future. The main message with regard to COVID, if you read between the lines, was that they are anticipating a likely second wave and all bets are off with the economy if that happens. Further, their "best case" scenarios still are for full recovery after a few years.
Chart Requests
ACB (Aurora Cannabis)
I am charting this before market opening, so it could change. It presently seems to be forming a bull pennant or flag, with the resistance shown. You want to see a break through that. If it is rejected, I would look to the $11 area for an entry. The 50 MA is curling up towards there, there's a key support to be tested, and it's around the 61.8% fib. Otherwise, above the line near $17 as support.
ALGO/BTC
Entering my buy zone - full setup posted on Tuesday!
BABA (ALIBABA)
Clearly in an ascending channel on the weekly. Price was rejected at the top and has since lost support at $211.70 and has lost the EQ of the channel. Personally, I would love to catch an entry at the channel support, but that would take quite a bit more movement down. Tough read in this exact spot, but I see a lot of resistance above after a failed attempt.
CDXS (CODEXIS)
Decent recovery, but still just a relief bounce for now, in my opinion. Price really needs to break back above the August lows at $12.68 to make this look like a more convincing reversal. Price is also in an ascending wedge, which statistically is bearish here and should break to the downside - not the most reliable pattern historically. Price is also at the 38.2% Fibonacci level here, which is acting as resistance. A flip of that line at $12.68 would change my view.
CWH (CAMPING WORLD)
Parabolic move up, pretty crazy. Anything above $16.96 looks good to me. There an impending golden cross between the 50 and 200 MAs, which is inevitable as a lagging indicator on a move like this. There's a possibility this reached the upper black line, but honestly my gut says this will drop down eventually retest that $17 area.
DREP/BTC
I am personally in this from 32, I really like the setup, even though there is very little information. 32 sats is the only really clear resistance/support flip possible so far, so holding this should send price back up once again. Bitcoin is having it's say at the moment, so we will see. Targets are above for now, unless it goes beyond and into price discovery. A break down of 32 should see more downside. I would not stick around long.
ENG/BTC
I love this setup if Bitcoin behaves. This is a major macro resistance that is being tested, with price currently trading slightly above it. Very simple, honestly. If it breaks, the ultimate target is the top of the descending line and the fibs.
ERD/BTC
Pretty damn accurate! This was from the past few newsletters. Let's see if it goes back up!
ETC/BTC
This is showing weakness. The pink line at 7580 is a key level and price was clearly rejected. It's also fallen back within the black descending resistance. I would not consider this below that 7580 line. If it does reverse back up, the fib levels drawn are the theoretical targets. If you are looking to get in, you could potentially find a lower entry.
GAS/BTC
This is trading in a large range at the moment and was recently rejected hard at the EQ (equilibrium, center line). It looks like it's coming down to retest that local descending resistance as support. The purple area is daily demand, so a bounce from there, at least temporarily, is likely. That said, rejected at the midline of the range usually means a trip to the range bottom. If it heads back up, the dashed line and range top are the immediate targets.
HOT/BTC
This is nearly impossible to chart. It broke out of that huge descending channel and never did anything. Such low volume on this pair - maybe people are trading it more against USDT, not sure. Either way, lines are drawn. Flip 7 to support, target is 10. Flip that, 13. Flip that, 18 and so on. You do not want to see new lows on this coin. If it breaks below 4 it could go the way of NPXS - below 1 SAT and no BTC pair.
LCX/BTC
This is impossible to chart since it just hit tradingview and the exchange. This is an hourly chart with gaps all over it because there is absolutely no volume. Check back in a few weeks and maybe we can take a good look.
MCO/BTC
This is a weekly chart, because I believe it shows the overall trend better. As you can see, price is in a clear ascending channel and currently testing the bottom. Bulls want to avoid any candles closing below the channel. If you are a believe in MCO, there is decent R/R to entering here at the bottom of the channel, because a bounce would likely send price to the top.
NEO/BTC
Sideways, so hard to tell what is happening. If you are looking for a position, either a bounce off of ascending support or the bottom black line could be good. Otherwise. I would like to see candles closing above 1155 and then a retest as support.
NKN/BTC
This looks like a pump and dump, really an ugly chart at this point. This is not something I would personally trade after the recent price action. You can see the key levels. Price is losing the 50 MA as we speak on the 4 hour, which would be bad. 189 is key support and is being lost as well - it was already retested as resistance on this candle, which is not closed. The lines below are potential entries, but as I said, no idea what to do with the crazy pump and then drop.
QLC/BTC
Hard to even draw lines on this chart, so I pulled up the Ichimoku cloud on the daily. Ugly. Clear rejection from the cloud on a huge wick up. Also trading below both the Kijun and Tenkan. Really nothing encouraging. Huge volume spike the past few days, all selling volume. I would not consider this until it's closing candles inside the cloud.
PDD (PINDUODUO)
The market has not opened, so this could change. Right now it is forming a new trading range after a sizable move up. A break below the range would confirm a local double top and should send price down to the black line once again. That would be a great entry again if you are bullish on this. A break above the range and it's price discovery again.
REN/BTC
Interesting spot here. This was clearly rejected hard at the top of the channel and has since printed a bunch of ugly daily candles, including one with a massive up wick. Lots of selling. That said, it is coming into an area of interest if you are a knife catcher. 2 daily candles (including today which is not closed) have bounced from the EQ of the channel. If that holds, it would indicate a trip to the top of the channel again is likely. If it fails, there are a few levels below to watch, all drawn as lines. Also the bottom of the channel. For now, it's dropping hard so very risky.
STNG (SCORPIO TANKERS)
This is a really tough read. It's been trending down since it started trading, along with everything oil related. Basically since 2014, being short oil has been the move. This dump on the global pandemic did not help the chart become any clearer. For now it looks like it's gotten a nice relief bounce, so who knows what comes next? I would watch to see if it holds the bottom ascending line or breaks the descending line to determine what to do next. Lots of resistance above (MAs etc).
TOMO/BTC
Dropping like everything else at the moment. At this point, I would want to see price above that descending white line. On a macro level, this did break out of it's downtrend. So when alts recover, this looks likely to do well. Key levels are all marked.
TTWO (TAKE TWO INTERACTIVE)
Honestly, no idea here. Same chart, nothing has changed. Stock charts look ridiculous across the board. The only notable thing is that there is a golden cross between the 50 and 200 MA, after a death cross weeks ago. That's generally a good sign. Sorry I can't offer more, but there's just no way for me to get a good read on this.
USO
This is basically impossible to chart. It had a reverse split recently (that's why price was so low before and has now magically gone back up) to account for futures. Charting it is tough and it's totally based on fundamentals. If you believe the oil situation will improve and the economy will remain open have at it. Otherwise, the it would go back down with the economy closing. You can see the lines on the chart that are drawn, but no reason to use them!
VET/BTC
No change since I shared this on Tuesday. It is holding relatively well against Bitcoin today, which is encouraging. You can see the relevant levels - again, I just shared it so you can revisit the setup.
WABI/BTC
Was looking great until alts started dropping today. Still, nothing of major concern, this should do well if Bitcoin stabilizes. Price broke the downtrend, entered the ichi cloud with strong volume and is presently holding within. This should at least target the top of the cloud and hopefully flip above. The tenkan (blue line) has also crossed the kijun (brown line) bullishly. Lots of volume on this coin.
WD (WIRECARD)
Honestly, I have no idea what is happening with this. The chart is ridiculous. Dump, pump, dump since February. All I can say is it looks bad until it at least flips the red line to support. But you have to understand the fundamentals of this to trade it, I would imagine. I know nothing about it.
XMR/BTC
Still trading in a huge range, the chart has not changed much at all. At this point, you want to see the ascending support hold (it is today so far) and the descending resistance broken. Otherwise, this is in the bottom half of the range which is more bearish than bullish on shorter time frames. I can't see a reason to enter this for the moment, personally.
XRP/USD
This chart has not really changed in ages. At this point, if you are looking to trade it, you want to at least see that local descending black line broken - that is the immediate resistance. Really, you want to see price trading above the light blue box that rejected this entire move up.
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.