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I’m really excited to announce that Aptos—the most exciting layer 1 blockchain competing with Solana and Ethereum—is now an official sponsor of this newsletter! Over the past few months, I’ve had the chance to get to know the Aptos team, create content with them, and interview their CEO and co-founder, Mo Shaikh. Stick around because I have a lot more to share about Aptos below the intro.
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In This Issue:
Carnage
Aptos Weekly Roundup
Bitcoin Thoughts And Analysis
Legacy Markets
Wall Street Is Waking Up To Ethereum
MicroStrategy Has A Blackout Period
El Salvador Is Facing Growing Pains
SEC Approves the Bitcoin + ETH ETF
Big Dump Ahead? How Long Will Bitcoin Stay Above $100K? | Trading Alpha
Carnage
The cycle is over. If you didn’t sell at the top or aren’t selling now, prepare yourself for a bear market. Expect at least two years of pain, lower lows, 90% drops, and perhaps another 90% on top of that. Bad news is on the horizon, bringing terror for altcoins and relentless doubt for Bitcoin.
If any of that doom and gloom resonated with you, or if those thoughts are swirling in your mind, I have news for you: you’re probably not going to make it through this cycle.
Let’s take a moment to assess the market’s pulse from the recent highs:
Bitcoin’s high: $108,268.45
Ethereum’s high: $4,106.96
Solana’s high: $263.83
XRP’s high: $2.8649
Now, let’s calculate the approximate percentage declines for these coins based on some current round numbers. Keep in mind, these figures are volatile and changing rapidly:
From $93,000, Bitcoin is down 13.8%.
From $3,200, Ethereum is down 21.9%.
From $184, Solana is down 30.3%.
From $2.25, XRP is down 21.46%.
Bitcoin pullbacks of 10% to 25% are typical in a bull market. While they’re not for the faint of heart, they’re also no cause for panic—this is standard, textbook behavior. Altcoins, as usual, tend to experience even steeper declines.
I couldn’t have said it better than Adam Back did in 2020. For historical context, Bitcoin's low on November 28, 2020, was $16,910.65. Let that sink in for a moment. Adam Back made his statement as Bitcoin was emerging from a brutal bear market that lasted nearly two full years.
Now, here we are, with investors panicking because Bitcoin has dipped below $100,000 in the past 24 hours—it almost doesn’t feel real. I’m not rooting for more chaos, but there’s a small part of me—and let’s be honest, some of you too—that’s so battle-hardened I’m tempted to shout, “Bring it on!”
Let’s pivot to practical tips for investors at every level—new, intermediate, and experienced.
If your current mindset is:
A) Buy more, or
B) Do nothing,
then you’re in a good place. I’m not saying you need to look at your portfolio and feel joy—this is a tough market, and we’re all human. But staying calm and focused is what separates winners from losers.
If your current mindset is:
A) I need to sell, or
B) I don’t believe in what I own anymore,
you’re in a less-than-ideal position. This doesn’t mean you’re beyond saving, but it’s time for some serious crypto soul-searching. Panic selling usually signals overexposure relative to your conviction, and if you’re questioning your investments, it’s time to rethink and rebalance.
Ask yourself this: Has anything fundamentally changed about crypto in the last three days? Or even in the past 24 hours?
What we’ve seen is an expected rate cut from the Fed, a slightly hawkish tone from Powell, and a significant drop in legacy markets. I’m racking my brain for a legitimate concern specific to crypto investors—and honestly, I can’t find one.
Yes, some hype around the Strategic Bitcoin Reserve (SBR) might be overlooking how slowly bureaucracy moves or Trump’s lack of specificity on the topic. But the fact that there’s even discussion of an SBR is insanely bullish over the long term.
The crypto market couldn’t be better positioned. We’re about to have a new SEC commissioner, a pro-crypto president, a pro-crypto Treasury Secretary, a government department called DOGE, and a crypto czar. Does it really seem likely that it’s all over just because Bitcoin sold off alongside legacy markets?
Dips will happen during a bull run—at random and unexpected times—to test and punish those with weak conviction. These pullbacks are healthy resets: they weed out panic sellers, give the market fresh momentum, and set the stage for the next leg up.
In this market, predicting dips is impossible. What matters is how you react.
As the year wraps up, Bitcoin is hovering around $100,000, and many altcoins are finally showing signs of life after years of stagnation. Take a moment to reflect on where we started, how far we’ve come, and what’s possible in the year ahead.
I’m grateful we’ve made it this far and excited for what’s around the corner. Have a great weekend, don’t panic—Wolf out.
Aptos Weekly Roundup
It’s time for my weekly roundup with Aptos. The market is in a state of carnage right now, but Aptos is still achieving some impressive things that I want to share with you here. Use this segment as an opportunity to learn more about an up-and-coming Layer 1 that deserves to be in the same conversation as Ethereum and Solana.
From Aptos, “We present the Aptos blockchain, designed with scalability, safety, reliability, and upgradeability as key principles, to address these challenges. The Aptos blockchain has been developed over the past three years by over 350+ developers across the globe. It offers new and novel innovations in consensus, smart contract design, system security, performance, and decentralization.”
Base is a major player in the space and is poised for a strong 2025, so for Aptos to rival the layer 2 is impressive. As you can see in the chart above, there was a moment when Aptos flipped Base. While I wouldn’t expect Aptos to permanently surpass Base, taking a significant chunk of its market share is certainly within reach, and the chart reflects that.
USDT is solidifying its position as the premier global stablecoin, and Aptos capturing some of the minting is a positive sign of growth. Not to mention, the fact that the USDT supply on Aptos has increased from $130 million to $340 million in just a month is huge.
Aptos was featured in the 2024 Electric Capital Development Report.
Aptos now ranks as the fifth-largest blockchain ecosystem for new developers exploring different ecosystems in 2024, as highlighted in the graph above.
Bitcoin Thoughts And Analysis
Bitcoin is in a corrective phase following a sharp rally, with the $92,000 50-day SMA acting as the first critical support zone. A break below this could lead to further downside toward $89,000 or $73,835. To regain bullish momentum, Bitcoin needs to reclaim $99,860, targeting $108,300 and higher. Keep an eye on the RSI and volume for confirmation of the next move.
Key Observations:
Recent Price Action:
Bitcoin recently reached a high of approximately $108,300, marking the peak of the current rally.
Following the high, BTC has experienced a sharp pullback, breaking below the $99,860 support level and currently trading near $93,569.
The pullback reflects a correction of approximately 14% from the peak.
Bearish Divergence on RSI:
RSI Divergence: While price made a higher high at $108,300, RSI formed a lower high, signaling a loss of bullish momentum.
RSI is now trending below 50, confirming bearish short-term momentum.
RSI will eventually make it to oversold, but that could be far down the road. Still worth noting that it is only at 40, so there could be a long way to go if the correction continues.
Key Support Levels:
$92,000: Immediate support around the 50-day SMA, which aligns with a consolidation zone during the earlier stages of the rally.
$89,000: A secondary potential support just below the 50-day SMA.
$73,835: Major breakout level from the prior range and a strong support zone if the correction deepens.
Key Resistance Levels:
$99,860: This level, previously a support, has flipped to resistance following the breakdown.
$108,300: Recent high and critical resistance, acting as the upper boundary for potential continuation.
Volume:
The recent sell-off has occurred on elevated volume, confirming active selling and validating the correction.
Moving Averages:
The 50-day SMA (blue line) is currently around $92,000, providing immediate dynamic support.
The 200-day SMA (red line) sits significantly lower, near $72,000, reinforcing long-term bullish structure.
Interpretation:
Bearish Signals:
The bearish divergence on RSI has played out, leading to the breakdown below $99,860.
Price is testing the 50-day SMA at $92,000, a key short-term support zone.
Support Zones to Watch:
$92,000 (50-day SMA): Critical for maintaining the short-term bullish trend. A strong bounce here would be encouraging.
$73,835: Long-term support level, aligning with the breakout zone from earlier in 2024. A breakdown to this level would still preserve the macro bullish structure.
Potential for Reversal:
To resume its uptrend, Bitcoin must reclaim $99,860 and hold above it. A strong bounce from the 50-day SMA would reinforce bullish sentiment.
Scenarios:
Bullish Case:
Bitcoin holds the 50-day SMA at $92,000, forms a higher low, and begins to climb back toward $99,860.
A reclaim of $99,860 with increasing volume would target a retest of the $108,300 high and potential continuation.
Bearish Case:
If Bitcoin fails to hold $92,000, the next logical support is around $89,000, followed by a deeper correction to $73,835, which would still align with the broader macro bullish structure.
You have been here long enough to know what bottom signal I am looking for, right?
RSI is oversold on the 4-hour chart, so now I will look for bullish divergence to signal at least a local bottom. We don’t need to see it, but it certainly helps.
Legacy Markets
US stocks are poised for further losses as market volatility intensifies due to concerns over a softer outlook for interest rate cuts and the looming threat of a U.S. government shutdown. The S&P 500 is on track for its steepest weekly drop since September, with futures down 0.9%, while the Nasdaq 100 dropped 1.4%, weighed by tech giants like Tesla and Nvidia. In Europe, the Stoxx 600 declined 1.7%, driven by a record 27% drop in Novo Nordisk shares after disappointing trial data for its obesity drug. Rising Treasury yields, now at 4.57%, and a resilient dollar have added to the pressure. Market turbulence is expected to continue, exacerbated by Friday’s "triple-witching" options expiration of $6.5 trillion in contracts. Concerns over the Fed's hawkish pivot, sticky inflation, and a potential U.S. government shutdown further dampen sentiment. Globally, China’s bond yields hit a historic low amid bets on monetary easing, while Japan’s yen strengthened after a key inflation gauge rose. Meanwhile, Bitcoin slumped for a third day, dragging down crypto stocks, while oil extended losses and gold gained.
Key events this week:
US personal income, spending & PCE inflation, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.9% as of 7 a.m. New York time
Nasdaq 100 futures fell 1.4%
Futures on the Dow Jones Industrial Average fell 0.4%
The Stoxx Europe 600 fell 1.7%
The MSCI World Index fell 0.3%
Currencies
The Bloomberg Dollar Spot Index fell 0.2%
The euro rose 0.3% to $1.0391
The British pound was little changed at $1.2505
The Japanese yen rose 0.4% to 156.78 per dollar
Cryptocurrencies
Bitcoin fell 4.9% to $92,576.87
Ether fell 9.3% to $3,098.48
Bonds
The yield on 10-year Treasuries declined two basis points to 4.54%
Germany’s 10-year yield was little changed at 2.30%
Britain’s 10-year yield declined one basis point to 4.56%
Commodities
West Texas Intermediate crude fell 1.2% to $68.54 a barrel
Spot gold rose 0.4% to $2,603.90 an ounce
Wall Street Is Waking Up To Ethereum
Ethereum’s streak of positive ETF inflows, driven largely by BlackRock and the iShares ETHA ETF, ended on Thursday after 14 consecutive days. Despite this, Ethereum demonstrated remarkable resilience, avoiding outflows until it dipped below $3,600, down from its high of $4,090. This strength highlights a clear divergence between crypto-native sellers and Wall Street buyers. The ETH ETF has finally gained momentum, and the asset holds a significant advantage for next year: the potential approval of staking yield for investors.
MicroStrategy Has A Blackout Period
Assuming MicroStrategy does indeed have a blackout period, this theory seems plausible. However, if MSTR performs well during January and Saylor can't issue debt, expect a fat Bitcoin purchase early February to resume the trend.
Random thought here, but while I was putting this brief story together, I came across this:
Point #3 is particularly significant here. Neither BlackRock nor Fidelity currently has an ETF submission for Solana. While this could change at any time, it likely depends on the resolution of lawsuits classifying SOL as a security. BlackRock and Fidelity are probably waiting for regulatory clarity to avoid unnecessary effort.
To confirm the accuracy of this point, I consulted Farside, and it’s true—only BlackRock and Fidelity are major movers in this space. A review of Bitcoin ETF inflows shows that the vast majority are dominated by these two issuers.
The market capture of BlackRock and Fidelity compared to everyone else isn’t even close, and the numbers for Ethereum mirror this trend exactly:
Institutional interest in Solana—or any other asset—almost entirely depends on BlackRock and Fidelity stepping in. Could Bitwise or another issuer pick up the slack if they don’t? Sure, it’s possible, but I’m not too confident there.
El Salvador Is Facing Growing Pains
In order to secure a $3.5 billion deal with the IMF, El Salvador has made a handful of Bitcoin-related concessions to appease the organization.
Key changes that must be made:
Chivo Wallet: The government-issued Chivo wallet, launched in 2021 to promote Bitcoin adoption, will be “sold off or wound down.”
Private Bitcoin Wallets: Other private Bitcoin wallets may continue to operate in El Salvador.
Bitcoin Acceptance: Bitcoin acceptance by the private sector will become voluntary.
Tax Payments: Taxes will only be paid in U.S. dollars, not Bitcoin.
Public Sector Engagement: Public sector involvement in Bitcoin-related activities and transactions will be limited. Further details have not been provided.
In response to what’s going on, Stacy Herbert, director of the Bitcoin Office in El Salvador said, “El Salvador will continue buying bitcoin (at possibly an accelerated pace) for its Strategic Bitcoin Reserve, Bitcoin capital markets will continue to be built; for example, the recent tokenized issuance of US Treasuries on Liquid via @NexBridgeSV and so much more is to be announced soon regarding capital markets on bitcoin.”
SEC Approves the Bitcoin + ETH ETF
The SEC has approved dual Bitcoin and Ethereum ETFs from Hashdex and Franklin Templeton, providing institutional access to these major digital assets through spot-based investment vehicles. The approvals include the Hashdex Nasdaq Crypto Index US ETF and the Franklin Templeton Crypto Index ETF. Ease of access and diversification lead to more inflows, it’s really that simple.
Big Dump Ahead? How Long Will Bitcoin Stay Above $100K? | Trading Alpha
Mark Yusko joins me to discuss his groundbreaking vision for Bitcoin’s future and its impact on global finance. In the second part of the show, Dan from The Chart Guys will share his market analysis and some trades.
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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.