The Wolf Den #30 - Chart Requests, Market Thoughts
thewolfden.substack.com
Don't panic.Easier said than done, right? Markets are in free fall and crypto has not been immune. Bitcoin price dropped from $7,200 to $5,600 in a single 30 minute candle, negating most bullish cases and inflicting maximum pain in a matter of minutes.As I have continued to point out, price does not drop $1,600 in a matter of minutes because your average trader is panic selling. That only happens when a large party decides to inflict pain on the market, market selling to coincide with global events. This is the easiest way for them to sell - there is little friction in the order books and everyone will sell along with them when they see price dropping. So maximum pain it is.Their motivation is impossible to discern. There are whales who have more Bitcoin than we can imagine, or that they can ever hope to sell on exchanges. This means that it benefits them to sell at any price, whether it be $20,000 or $6,000. They need the liquidity - price is irrelevant. It could be a single party liquidating all of their holdings to retire to an island. There is no way to know. This is the risk of investing in markets where the bulk of an asset is owned by a select few who can easily move the price on a whim. That's why our goal as traders and investors is always to "think like a whale" and be on their side.As you know, a large portion of my crypto portfolio is in long term Bitcoin holds. This part of my holdings has seen a significant reduction in value, like everyone else's. It is painful, but hindsight is 20/20. Nobody can expect to time tops and bottoms. All we can do is invest what we can afford to lose, step back and let it play out. I still firmly believe that Bitcoin will eventually see new all time highs. I also still firmly believe that Bitcoin will have tremendous VALUE regardless of PRICE if the world descends into more chaos. Nothing changes for me because of price movement over a few days. The same goes for legacy markets. While I have successfully shorted (and continue to short) a number of assets, it is not enough to offset the (hopefully temporary) losses in my portfolio. Everyone is feeling the pain for now. But things will get better - it's just a matter of time. Things ALWAYS get better if you take your time and move slowly.That said, I have also taken a lot of profit in the past few weeks (in all markets), so I am presently sitting in over 50% cash across the board - crypto and legacy markets alike. I was extremely hesitant to sell so much stock 2 weeks ago, but am thrilled that I did at this point. I also locked in a home refinance yesterday - perhaps a bit early, but at all time low rates I am not going to question the decision. There are real opportunities now if you look for them. I am not a financial advisor. The only advice I can give is to stay calm, move slowly and avoid rash decisions. The world will eventually recover and so will your portfolio. When people really start to capitulate (already seeing signs), the buying opportunities will be numerous. This newsletter has been tremendously difficult for me to write today. I am currently sorting through many personal decisions regarding my family and friends, their health and safety. I am prepared for the worst and saddened that we have reached the point with the virus where we have to be truly concerned about our loved ones. It's a very rough time. We need each other more now than ever. Do not allow yourself to descend into despair or anger, or to behave irrationally or violently towards others. We all need a level head and a whole lot of love for our fellow humans. Please take the virus seriously and follow the recommendations that you continue to see. There's no downside to being extra cautious. And now to business:A general note - whenever I draw a line on a chart, it should be viewed as elastic and not static. It is more of a zone. So the areas around those lines are usually more accurate. Further, I try to use multiple techniques and indicators on various charts, so if you are learning TA, you should read through all of these to see how I blindly look at a chart. A lot of these charts look great.If you are a new member, please refer to Issue 10 (you can click on it here - https://www.getrevue.co/profile/TheWolfDen/issues/the-wolf-den-crypto-newsletter-issue-10-219754 and have it sent to you) for instructions on how to make my charts your own.IMPORTANT NOTE - I will only accept requests on Wednesdays, between 8 AM and 1 PM EST. That will make sure that they are your most pressing requests. Please mark it in your calendar and email me by responding to this email!Charts are difficult to read or use on a day like this - everything has a huge down candle. As always, use common sense and take charts with a grain of salt.
The Wolf Den #30 - Chart Requests, Market Thoughts
The Wolf Den #30 - Chart Requests, Market…
The Wolf Den #30 - Chart Requests, Market Thoughts
Don't panic.Easier said than done, right? Markets are in free fall and crypto has not been immune. Bitcoin price dropped from $7,200 to $5,600 in a single 30 minute candle, negating most bullish cases and inflicting maximum pain in a matter of minutes.As I have continued to point out, price does not drop $1,600 in a matter of minutes because your average trader is panic selling. That only happens when a large party decides to inflict pain on the market, market selling to coincide with global events. This is the easiest way for them to sell - there is little friction in the order books and everyone will sell along with them when they see price dropping. So maximum pain it is.Their motivation is impossible to discern. There are whales who have more Bitcoin than we can imagine, or that they can ever hope to sell on exchanges. This means that it benefits them to sell at any price, whether it be $20,000 or $6,000. They need the liquidity - price is irrelevant. It could be a single party liquidating all of their holdings to retire to an island. There is no way to know. This is the risk of investing in markets where the bulk of an asset is owned by a select few who can easily move the price on a whim. That's why our goal as traders and investors is always to "think like a whale" and be on their side.As you know, a large portion of my crypto portfolio is in long term Bitcoin holds. This part of my holdings has seen a significant reduction in value, like everyone else's. It is painful, but hindsight is 20/20. Nobody can expect to time tops and bottoms. All we can do is invest what we can afford to lose, step back and let it play out. I still firmly believe that Bitcoin will eventually see new all time highs. I also still firmly believe that Bitcoin will have tremendous VALUE regardless of PRICE if the world descends into more chaos. Nothing changes for me because of price movement over a few days. The same goes for legacy markets. While I have successfully shorted (and continue to short) a number of assets, it is not enough to offset the (hopefully temporary) losses in my portfolio. Everyone is feeling the pain for now. But things will get better - it's just a matter of time. Things ALWAYS get better if you take your time and move slowly.That said, I have also taken a lot of profit in the past few weeks (in all markets), so I am presently sitting in over 50% cash across the board - crypto and legacy markets alike. I was extremely hesitant to sell so much stock 2 weeks ago, but am thrilled that I did at this point. I also locked in a home refinance yesterday - perhaps a bit early, but at all time low rates I am not going to question the decision. There are real opportunities now if you look for them. I am not a financial advisor. The only advice I can give is to stay calm, move slowly and avoid rash decisions. The world will eventually recover and so will your portfolio. When people really start to capitulate (already seeing signs), the buying opportunities will be numerous. This newsletter has been tremendously difficult for me to write today. I am currently sorting through many personal decisions regarding my family and friends, their health and safety. I am prepared for the worst and saddened that we have reached the point with the virus where we have to be truly concerned about our loved ones. It's a very rough time. We need each other more now than ever. Do not allow yourself to descend into despair or anger, or to behave irrationally or violently towards others. We all need a level head and a whole lot of love for our fellow humans. Please take the virus seriously and follow the recommendations that you continue to see. There's no downside to being extra cautious. And now to business:A general note - whenever I draw a line on a chart, it should be viewed as elastic and not static. It is more of a zone. So the areas around those lines are usually more accurate. Further, I try to use multiple techniques and indicators on various charts, so if you are learning TA, you should read through all of these to see how I blindly look at a chart. A lot of these charts look great.If you are a new member, please refer to Issue 10 (you can click on it here - https://www.getrevue.co/profile/TheWolfDen/issues/the-wolf-den-crypto-newsletter-issue-10-219754 and have it sent to you) for instructions on how to make my charts your own.IMPORTANT NOTE - I will only accept requests on Wednesdays, between 8 AM and 1 PM EST. That will make sure that they are your most pressing requests. Please mark it in your calendar and email me by responding to this email!Charts are difficult to read or use on a day like this - everything has a huge down candle. As always, use common sense and take charts with a grain of salt.