The Wolf Den #255 - Welcome To The Matrix
Ethereum On-Chain Indicators Are Bullish - IntoTheBlock
In this report, we bring to you the latest in on-chain cryptocurrency analysis. We look at the blockchain directly and analyze balances, transactions, and the overall activity of market participants. This gives us a unique insight into the future of the market.
This section is written in conjunction with IntoTheBlock (ITB). ITB is an intelligence company that leverages machine learning and advanced statistics to extract intelligent signals tailored to crypto-assets. IntoTheBlock tackles one of the hardest problems in crypto: to provide investors with a view of a crypto asset that goes beyond price and volume data.
The Wolf Den research team uses IntoTheBlock to dig deeper and get the most important insights about the crypto market.
Ethereum On-chain indicators paint a bullish scenario
For the better part of the last two weeks, crypto markets endured a significant correction, and while the market still seems to be indecisive at the moment, several on-chain indicators are painting a bullish scenario for the second-biggest crypto-asset, Ethereum.
One key indicator that shows the strength of the Ethereum Holders is IntoTheBlock’s Hodlers indicator, which measures the number of addresses holding Bitcoin for a period of more than 1 year. Despite the recent massive sell-off, the Hodlers indicator is at its highest level ever, meaning that most of these holders didn’t sell during the recent crash.
As of June 2 using IntoTheBlock’s Ethereum Ownership by time held analytics
For a crypto-asset to accrue value it is important to have long-term supporters that are not looking to sell when markets are in turmoil, so it is believed that what we recently experienced were short-term holders selling at a loss by panic-selling. All of this while long-term holders looked to increase their position by buying the dip.
What’s more impressive is that over the past 12-months, we have experienced an almost linear growth in the number of Hodlers. Despite Ether's recent price action, it is now at about 34.53 million addresses, an All-Time-High for this metric, representing 58.57% of the total BTC holders.
Along with the number of long-term investors, the total number of Ethereum holders has also been increasing.
As of June 2 using IntoTheBlock’s Ethereum Network Analytics
The total number of addresses with a balance (holders) reached a new high of 58.96 million on June 1st. But one interesting fact is, since the crash of May 18, the number of addresses with a balance increased from 58.66m to 58.96m yesterday. This suggests growing adoption in Ethereum in spite of short-term price corrections.
While the long-term holders remained strong during the recent crash and short-term holders sold at a loss, IntoTheBlock's Net Flows indicators spotted massive amounts of USDT and USDC being sent to centralized exchanges, while large amounts of ETH and BTC were being withdrawn during the same period, which could be translated as long term holders moving their positions to DeFi protocols to increase their yields or just putting them in cold storage.
As of June 2 using IntoTheBlock’s Ethereum Exchanges On-chain Flows Analytics
In the case of Ether, on May 24 we spotted the second-largest withdrawal from exchanges in over 15 months, as a total of 667,020 ETH were removed. As the highly-awaited EIP-1559 upgrade launch date is getting closer, more investors are accumulating ETH at these prices.
Bitcoin Thoughts And Analysis
DAILY CHART
When breakout!? Really nothing to analyze until Bitcoin makes a clear move out of this symmetrical triangle and, ideally, above 42K. Same analysis as the past two day.
Altcoin Charts
The DOGE setup from Monday went up almost 50% in a day, so I hope that some of you caught it. Altcoins are looking decent today, with a few seemingly breaking out of their consolidations. I shared a lot of these inverse head and shoulders setups in the last week, and they seem to be playing out. Here's a tweet I sent about BNB, which I shared last week as an example.
AAVE/BTC
AAVE looks interesting here, clearly pushing against a key area of resistance. I would not buy it unless it breaks above and then look for a retest as support. Sometimes the retest does not happen - that's life if you are looking for the "safest" trade. Either way, this generally looks like bullish consolidation after rounding out nicely, and the first step would be a break of .010556. The target would be recent highs. If it breaks those, then I would be looking for price discovery.
Alts remain risky, because Bitcoin is likely to become volatile very soon, and that could be bad for alts whichever way it goes. If you are trading (I am not), then make sure to have a stop in place as always.
DOT/USDT
Clean break out resistance which is also the neckline of an inverse head and shoulders. At this point, the first target is already almost hit at $26, so the ideal entries are either a retest of support (the old descending resistance or ascending support) or a break of $26 and retest as support. That should send price up to supply and to the target of the IHS, around $40.
Remember, this ALL DEPENDS ON BITCOIN. Manage your risk!
Guggenheim Files SEC Fund For Crypto Exposure
One of the top investment firms has filed a new fund through the SEC called the Guggenheim Active Allocation Fund, which will allow crypto exposure. The size of the fund has not been made public, but the fund has made it clear that it is interested in cryptocurrency, digital assets, and virtual currency investments.
From the official report: The Fund may seek investment exposure to cryptocurrency (notably, Bitcoin), often referred to as “virtual currency” or “digital currency,” through cash settled derivatives instruments, such as cash settled exchange traded futures, or through investment vehicles that offer exposure to Bitcoin or other cryptocurrencies through direct investments or indirect exposure such as derivatives contracts.
While the masses continue to seemingly turn bearish on crypto twitter, Guggenheim, Blackrock, Goldman, Dalio, Ichan and so many more are showing real interest. Which side would you rather be on?
Future Cars Will Mine Bitcoin And Drive
Electric vehicle manufacturer Daymak announced their production of an electric vehicle that will come with a GPU installed to mine cryptocurrencies. The car can be paid for in crypto, will have solar power charging capabilities, and will mine crypto, supposedly, a “non-depreciating asset.” The idea is amazing and a hint at the future, but also probably ahead of its time.
If you are looking for an appreciating asset, it's probably smarter to just hold onto your crypto instead of using it to purchase an asset that barely avoids depreciation, assuming their claim holds true. That being said, at a fair price, it may be worth the cost in fiat terms. I hope the car is a breakthrough in the intersection between depreciating assets and appreciating assets. The idea seriously couldn't be cooler.
“We envision a future where your highway tolls, your parking, and your drive-thru order will be paid directly on the fly with crypto. Your online bills and your banking can be handled through the same software platform paid in crypto,” stated Aldo Baiocchi, President of Daymak.
The Wolf Of All Streets Podcast Ft. Charlie Lee
Although Charlie Lee thought he was late to crypto in 2011, he decided to make his own currency for fun - a coin similar to Bitcoin... but lighter. Little did he know his Litecoin cryptocurrency would become one of the most popular coins in the world and remain so a decade later. According to Lee, HODling isn’t about luck - it takes strong conviction in your beliefs to weather the crypto markets. Lee is as strong as it gets, remaining a long-term bull and working towards Litecoin becoming the preferred currency over the long run.
In this episode Charlie Lee explores:
Why Litecoin was created
Panic selling
Bull market volatility
ICOs and dog coins
Hyperinflation
Dust wallets
Peer-to-peer cash
Bitcoin’s fungibility
Elon Musk in the markets
Charlie “selling the top”
The future Lightning network
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On-chain and fundamental analysis, research, predictions and indicators, all in one place. Highly recommend.
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.