The Wolf Den #91 - Know Your Strengths, Ethereum Raging And More
Bitcoin Thoughts And Analysis
Bitcoin continues to show strength. I exited my last round of longs from $11,250 or so at an average of $11,750. Bitcoin has continued to rise. The dollar looks weak as well, which adds some fuel. Bitcoin looks generally bullish, but I still would not be surprised by some retracement on shorter time frames. Either way, this market is in full dip buying move, if you get the chances.
MONTHLY CHART
We had a monthly candle close last night, which ended up being a green (grey) spinning top. This is not a doji, because the real body is a bit too thick. From Investopedia:
A spinning top is a candlestick pattern with a short real body that's vertically centered between long upper and lower shadows. The candlestick pattern represents indecision about the future direction of the asset. Neither the buyers nor the sellers could gain the upper hand. The buyers pushed the price up during the period, and the sellers pushed the price down during the period, but ultimately the closing price ended up very close to the open. After a strong price advance or decline, spinning tops can signal a potential price reversal, if the candle that follows confirms.
As stated here, this indicates indecision - it is really neither bearish or bullish and leaves us waiting a month for confirmation of direction. It is a sign to be cautious.
Interesting to note on the monthly that the August candle almost perfectly touched support below and resistance above before settling back in the middle.
DAILY CHART
It seems that the bearish ascending wedge has turned into more of an ascending channel with the move up the past few days. This is neither particularly bearish or bullish, we just want to watch and see if the bottom breaks down. The wedge was more "bearish" and did play out without too much strength. The local support at $11,539 held well and was the catalyst for the large candle today. It is hard to feel particularly bearish with a daily candle this large currently printing. We will have to see how the day ends.
4-HOUR CHART
Clear and beautiful breakout from the descending blue channel that I discussed a number of times . Flipping levels on the way up from resistance to support. The fresh support to watch on small time frames is that ascending red line. Technically, this should visit the top line at some point. If you are scalping, a drop to the red line would be a good risk/reward long, because if it breaks the loss would be small.
HOURLY CHART
This is the reason that I am cautious and at least watching for a bit of retracement. We have a potential (not confirmed) bear div coming out of overbought territory on the 1 hour chart. Not such a big deal, but it would take quite a move on volume to push price above without having this div confirm in the coming hours. At the moment, price could close with a lower high as well - no div yet.
If this div confirms, I would expect a bit of retracement before further movement up. I will be watching higher time frames for divs, to see if they build up.
Altcoin Charts
It's a strange time for alt coins at the moment, and it's very hard to find setups that look great. Why is this strange? Because Bitcoin Dominance finally broke another major support. You can see how accurate the analysis on the Dominance chart has been by revisiting this thread.
I posted that chart on twitter yesterday, anticipating the breakdown. Here is where it's at now.
The issue here? The only real benefactor has continued to be Ethereum and DeFi tokens. If you have read a single word I have written this year, you know that I am MEGA BULLISH on Ethereum and have been for almost a year.
We just saw SUSHI and YFII added to Binance within a few days of them coming into existence, and both are pumping like mad. And it's nearly impossible to chart and trade DeFi tokens with minimal price history and full fomo. You need to make a decision as a trader as to whether it's worth FOMOing into these coins that are moving the entire alt market right now or not. There's really no great way, technically, to justify an entry or exit. This leaves normal alt traders waiting for a bit of volume and liquidity to come back from DeFi.a
I looked for an hour and found almost nothing compelling at this moment. Algo could be worth a shot, but the chart is not even great here. Otherwise, we will have to reassess on Thursday. There's no need to trade when the market is not ideal, and for now it's DeFi or nothing. Your choice.
ALGO/BTC
This was one of the weaker "breakouts" that I have seen. The only reason I am posting this is that it's sitting right at a key support now. If it breaks down with a candle close below, you can exit and take a tiny loss. This is not a great chart, honestly. It's just an opportunity for a low risk trade with a high potential reward.
Legacy Markets
Stocks continue to rise, metals look good and the dollar is dying. Read below.
DXY (USD)
The dollar looks dead. I have been discussing this for months, including last week when the dollar tried to bounce. It was not to be, and the 10 year channel from the last recession has now broken down. We should see a retest of that channel bottom, a nice little pump at some point. But by any technical view, the dollar just made a definitive bearish move that should see long term continuation.
This would be very good for bitcoin, since they have a clear inverse relationship. Likely good for almost all assets - including gold, silver and stocks.
DOYU (DOUYU INTERNATIONAL)
A subscriber asked me to take a look at this and I really like what I see. DouYu International Holdings Ltd. develops and operates game-centric live streaming platform in China, both on personal computer and mobile apps. What stood out to the person who sent this is the forecasts from analysts... the median longterm being $109. It's presently only $17.24, which is the all time high that is being tested. I want to see it above that line. A break above this level and this is in price discovery. Here's the forecasts:
$YFI Hysteria Clearly Explained
This is a great thread explaining the hysteria around YFI. I am copying and pasting it here.
If you don't understand YFI then I'd encourage you to read this thread & our July 5FA research report which I'll link below. It's actually very easy to understand, so here it goes!
Most beginners hear about staking, yield farming, rewards & these highs APY (Annual % Yield) & think to themselves "this is all too hard". In reality if you take the time to learn how to send tokens from one address to another, you're 90% of the way there!
The hard part comes from knowing what tokens to pick & where to put them to get the best return! This is where YFI & Yearn Finance come in.
Yearn Finance is a protocol that simply finds the best yield for whatever token you have, automatically.
All you have to do is deposit your coins into their system.
If I have some USDT stable coin, I deposit USDT, it will give me "y" tokens in return, ie yUSDT. Hence the name Yearn Finance, "yEarn" Finance. But this is only the beginning...
Andre the creator was a true libertarian. He created this system along with the YFI governance token. Token holders get to make decisions about what to do. He took no tokens for himself. Supply actually started at 0. 30,000 coins could be "farmed" as rewards for using the system when it was launched to build liquidity & trust.
BTC has 18M coins. YFI has 30k coins. If YFI had as many coins as Bitcoin, price would be $50. People wouldn't have their knickers in a knot. But the herd don't understand simple concepts like market cap.
They are busy watching "best coins under $1" videos from Youtubers who also don't understand the basics.
The herd & media will continue shouting "scam", "who would pay $30k for a coin". The same thing they say about Bitcoin. If they don't understand market cap, I doubt they understand fractions or decimal places.
Another cool feature of this protocol is how the system automatically reallocates ALL coins of the same type in one transaction. If 1000 people have all deposited USDT to earn yield, when the protocol moves them from Compound to Uniswap, usually they may expect to pay a Tx cost of $100 in ETH Gas fees as it is a complex smart contract with many moving pieces. Yearn groups them together, splits the cost (5% each) & does it in one Tx.
Happy days!
Now comes the real kicker! Users pay 0.5% management fee when withdrawing. This goes to YFI token holders. Currently YFI has $1B in TVL (Total Value Locked).
I think the stat is TSLA has a P/E ratio of 10000. YFI has a P/E ratio of 10.
This is just from the "yVault" product I've described, not even all the other products they offer. As I shared recently they've teamed up with Nexus Mutual to offer insurance on DeFi products.
But the new product that has me excited & even more bullish on ETH, is yETH.
This adds to a long list of catalysts for Ethereum, but it also reduces the available supply. Anyone who owns ETH can earn the best yield automatically by HODLing yETH.
It could also mean other protocols find it harder to compete with Ethereum when offering staking rewards.
Very excited to see what the genius creator of this protocol has in store for us next. Token holders vote, he builds. Anyone can contribute. I hope this has given you a better understanding of what all the hysteria has been about of late.
When Life Gives You Peppers - A Story
By Sahil Bloom.
In 1867, a ruined Louisiana banker started growing peppers in his garden. Today, the legacy of that garden stretches across 170+ countries and generates over $200 million in annual revenues. Who's up for a story?
Edmund McIlhenny was born in Hagerstown, Maryland in 1815. Sometime around 1840, he moved to New Orleans, hoping to start a career in finance. He established himself as a banker and eventually became the owner of his own bank. By 1861, he was a very wealthy man.
But then, the Civil War began. McIlhenny and his wife fled to Texas during the war. When the war ended, the South descended into economic chaos. Banks collapsed. McIlhenny was ruined. He and his wife moved in with her parents at their home on Avery Island in Louisiana.
With extra time on his hands, McIlhenny took up a new hobby: gardening. Legend has it that sometime between 1866 and 1868, he was introduced to Capsicum frutescens, the Tabasco pepper. Noticing the seeds tasted good on his food, he began to grow his own crop of the peppers.
With a harvest of ripe peppers coming out of the rich, fertile Avery Island soil, McIlhenny started experimenting with recipes for a pepper sauce, a popular condiment at the time. After a lot of trial and error, he believed he had developed the perfect recipe.
His process was a highly-laborious one. He would mash the ripe peppers with a potato masher, mix them with local salt (Avery Island was a salt dome), age twice, blend with vinegar, strain, and decant into old cologne bottles. And just like that, Tabasco sauce was born!
While the label warned buyers of the spice level of the sauce, funny stories of overuse did surface as its distribution expanded. In a 1901 New York Times article, a customer was quoted as saying, "B'jocks, though, I was thunderin' nigh dead when I fust et that ketchup."
Edmund McIlhenny died in 1890, but his legacy was destined to live on. Tabasco developed a loyal, cult-like following around the United States, and then around the world. McIlhenny's sons continued to build the company, scaling it to new heights with their marketing prowess.
Today, Tabasco continues to be recognized as the original hot sauce, with the company generating over $200 million in annual sales across 170+ countries. While the peppers are grown all over the world, the bottling and processing still happens in Avery Island, Louisiana.
The McIlhenny family continues to own and operate the company to this day. It is one of the most successful family-owned businesses in America. So next time you throw some of that hot Tabasco pepper sauce on meal, tip a hat to Edmund McIlhenny, whose legacy lives on.
YFI Coin Reaches $38,000
Nothing in the DeFi space surprises anymore. Overnight, a coin hardly anyone knew weeks ago, became the most expensive coin on the market. YFI boasts a price of over $35,000 and with only 30,000 tokens in supply, YFI’s market cap has exceeded the 1-billion-mark record fast. As excitement continues, contradicting public statements have been thrown around including YFI is “the hardest asset the world has ever known” and YFI is, “a completely valueless 0 supply token.” The statements came from Nairametrics, a Nigerian news source, and the creator of YFI Andre Cronje respectively.
YAM, the last DeFi token that went parabolic bounced back 99.95% creating a literal “L” shaped graph as the price initially skyrocketed vertically than retraced to a flat, worthless price. Similarly, its creators stated the token that had no real value. Perhaps YFI holds more promise because it isn't an experiment but buying any token that has increased 3,500% in roughly 20 days in extremely risky. Please exercise caution.
XRP Holders are Entitled to Spark Token
An airdrop is incoming for all XRP holders this December.
Flare Network is a Ripple backed Blockchain firm that is extending the utility of XRP tokens through their native Spark Token. The spark token, FXRP, is a trustless representation of XRP connecting XRP to the Ethereum Virtual Machine. Most important to understand is how investors and traders can take advantage of this imminent free token airdrop.
The snapshot date for the airdrop was just announced to be December 12th. XRP holders will be required to hold their tokens on an exchange or wallet that will support the airdrop to receive Spark tokens. 45 million Spark tokens will be distributed evenly among all participants with zero cost to participate. A snapshot will execute taking a digital record of the XRP tokens so the Spark tokens can be distributed. In the past, forks have been profitable for participants at zero participation risk.
Days ago, Spark Network cited 295 million XRP are already set up to receive the new token. With increasing demand and free tokens, the airdrop is essentially free money with no risk. It is imperative that XRP holders do their research to make sure they don't fall for a scam asking for private keys or asking for XRP to be sent to a random address when trying to participate.
Here are the details:
Bitcoin Voted Safest Way To Invest In Argentina
My friends at Paxful released a survey stating that crypto is viewed as the safest asset in Argentina, a country with hyper inflation and an ongoing economic crisis. This can be taken with a grain of salt, as the survey was conducted by a Bitcoin focused company. That said, the evidence is clear that crypto holds value in countries where the local currency becomes worthless. We have seen the same phenomenon in countries like Venezuela and Lebanon.
The Wolf Of All Streets Podcast Ft. Samson Mow
Samson Mow entered the crypto space in late 2014, developing one of the first major Bitcoin exchanges. He went on to head two unique companies, Blockstream and Pixelmatic, both heavily involved in Bitcoin and the Blockchain. Samson is well known for his perma-bull stance and passion for Bitcoin and its potential.
Samson and I further discuss Bitcoin preventing an Orwellian future, managing two companies at once, Fidelity leading the adoption charge, Zeus Capital and INX controversy, getting Grandma to buy Bitcoin, ETH 2.0, the Lightning Network, CBDCs, raising 3 million in capital for an upcoming game, 60% of Bitcoin mining being in China, the dangers of DeFi, securing your crypto and more.
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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.