The Wolf Den #365 - Asymmetric Bets
Bitcoin Thoughts And Analysis
MONTHLY CHART
I like to include this chart in every free issue, because we have new subscribers and I want to stress the importance of zooming out.
The monthly chart shows an ascending channel that has been valid since 2013. Each and every time that the EQ (equilibrium, center dashed line) of this channel has been flipped to either resistance or support, price has visited the bottom or top of the channel.
Price just flipped the EQ to support, after 6 months of testing that level. 6 monthly candles in a row! If history repeats (it does not have to), then price should visit the channel highs, giving us multiple 6 figure targets, depending when it happens.
When in doubt, zoom out. On large time frames, it truly look like this Bitcoin move is just getting started.
WEEKLY CHART
Indecision. The weekly chart shows the massive breakout through the blue line and the higher high that invalidated any bearish case a few weeks ago. After that, we saw bullish follow through.
Now we have 2 candles in a row, with a 3rd potentially forming, that indicate indecision. The first blue) was a shooting star, often viewed as a top pattern but requiring confirmation from the next candle. This candle also had a bearish SFP (swing failure pattern), with a wick above the previous all time high and close well below. The following candle was an indecisive spinning top, with another spinning top potentially forming now. It is way too early to judge this weekly candle.
At this point, bulls want to see a break and close above the all time high.
4-HOUR CHART
Bitcoin price continues to trade around the red neckline of the local inverse head and shoulders and the black descending line that indicated a breakout of the recent consolidation from the all time high. Assuming candles continue to close above these lines, we should see price returning to the recent all time high as targets of both patterns.
BOTTOM LINE. Bitcoin is trading somewhat sideways, still largely consolidating in advance of the next move. All time frames still look generally very bullish.
Altcoin Charts
I do NOT share signals in this section. I share setups and charts that I am watching, in an effort to help show you how I view a chart and what criteria would be necessary for me to consider taking a trade. NEVER blindly buy something because it is listed in a newsletter or posted on twitter. You need to have a plan when you enter a trade. These are just ideas, and are almost always “if, then” scenarios. If a certain set of things happen, then I would consider a trade.
Layer 1 coins continue to dominate, making new all time highs and retesting them as support before entering price discovery. We have seen it over and over again with Solana and others. I shared it on DOT this week. EGLD and AVAX are both doing it today. This has been an easy trade for months. It won't always repeat, but ride it until it does not work.
Our recent trades have been great - it's been a solid run. But never forget to manage your risk, use stops, and lock in gains.
AVAX/USDT
AVAX just made a new all time high but is sitting at resistance. You do not generally want to buy until you have confirmation in the form of a close above resistance. If this closes above, we will have a new all time high and look for the same retest as support that we have seen over and over again on layer 1 coins. You can see that bullish market structure is intact, with a series of higher highs and higher lows. The most recent higher low was just confirmed with this higher high.
Blue skies ahead once this closes above $79.80.
EGLD/BTC
There is no clear entry at the moment, but EGLD is clearly a "buy the dip" asset for the moment, so keep in mind that it has broken out of the blue descending wedge and is headed to the recent highs as the target.
This is not the first time I have shared this - subscribers have seen these charts before.
EGLD/USDT
Newsletter subscribers know that I am a huge fan of Elrond. We traded ERD two years ago from 15 sats to 300, and have traded EGLD from $10 to the current price.
Believe it or not, another opportunity seems to have presented itself, with a break of the all time high and retest as support. This means that price is, once again, heading into discovery for new highs. Market structure continues to be bullish, with higher highs and higher lows. No reason to believe this is ready to stop yet, unless Bitcoin makes a major move.
HNT/USDT
Paid subscribers have seen this chart a number of times, but I wanted to share it because there is still some opportunity, albeit a bit "late." Our entries were the break of the blue descending flag and yesterday's reset of the all time high as support. You can see that I circled the area a few days ago.
The $39 target was already in play on the break of the blue descending line, but now it's clear sailing because the last key resistance (previous all time high) has been broken and retested as support, almost to the dollar.
This can go much higher than the target - it is in price discovery.
Legacy Markets
FB (FACEBOOK/META)
Meta Platforms, aka Facebook, is forming a morning star pattern on the weekly chart, with a clear retest of the 50 MA (blue line) last week. As you can see, two weeks ago we had a gap down to open, then a long legged doji with a green body to follow, a bullish signal. This week gapped up and now looks likely to close bullish, but we need to wait 2 days for confirmation.
If this happens, we have a very clear bottom signal and price should continue up to at least the highs.
Is Bitcoin A Speculative Asset? IntoTheBlock
The Wolf Den research team uses IntoTheBlock to dig deeper and get the most important insights about the crypto market.
Is Bitcoin a speculative asset? Think again.
The UTXO chart shows the volume of transaction activity over time relative to age, with colors blue to red based on how recent those coins were last transferred. The recent growth of the yellow bands points to an increase in the number of coins that have entered the market over the past 6 to 12 months (this currently accounts for 20% of Bitcoin in circulation). While the blue band measures for transactions several years older, which continues steadily to grow, pointing out how Bitcoin is becoming less and less transacted and thus stored as an investment over time.
As of November 4 using IntoTheBlock’s Bitcoin network indicators
The data can be gathered in a single metric that takes into consideration all Bitcoin addresses and their activity. This is calculated by averaging the holding times of all addresses before they transfer (or sell) Bitcoin. The average time that Bitcoin is held is 3.3 years. Over an asset with a lifetime of 13 years, it can be concluded that Bitcoin on average has been held for more than one quarter of its lifetime.
These analytics show that, behind the buying activity of Bitcoin, there is a real demand of investors that want to hold the asset for the long-term. This is in line with the thesis that Bitcoin is being used mostly as a store of value, which can be held for years without it losing its value. In fact, in the last month, there have been opinions by influential institutions like JPMorgan and Paul Tudor Jones assessing Bitcoin as a better inflation hedge than gold. So far this has been true for Bitcoin, and there are no early signs that holders should start thinking otherwise.
SHIB Momentum Explained - IntoTheBlock
SHIB has been the hottest topic in crypto. In a ridiculous rally, Shiba Inu (SHIB) pushed its market capitalization past Doge. The debate about the macro-factors behind the SHIB rally have been all over the news. By leveraging the blockchain's transparent nature, we can provide some interesting insights about it.
SHIB transactions over $100k have skyrocketed, showing momentum among large investors. This shows that the SHIB rally is not only about small transactions.
As of November 4 using SHIB Large Transactions Indicators
As evidenced by the graph above, over the past 30 days, SHIB investors have transacted over 30 billion in on-chain transactions greater than $100k. Looks like the SHIIB momentum is attracting big players as well.
And by going deeper into the total transactional volume, we discovered that in just 30 days, SHIB on-chain volume surpassed $36.18 billion. What’s impressive about it is that it represents over 9.19% of the entire Ethereum transactional volume in that period.
As of November 4 using Shibaswap insights
Shibaswap, transacted more the $3.9 billion and generated over $11.731m in Fees. This is a 657% increase vs September.
But what about the holders?
1) Most addresses are holding SHIB between 1 month and 12 months and not aggressively trading. This is a change of pattern over the past few months. Previously, short term trading dominated.
As of November 4 using SHIB Ownership Indicators
2) You probably heard about the addresse that bought $8,000 worth of SHIB a year ago thatd is now worth >$5b. Well, there are close to 5000 SHIB holders that bought around 20% of the all-time-low price. Some people are making serious money with SHIB.
As of November 4 using SHIB Ownership Indicators
The All Time Lowers indicator shows the addresses (with a balance) that bought within 20% of the token’s all-time low price.
Chart Requests
Every Wednesday, I take requests from Wolf Den subscribers and look at them live on YouTube. Here are your charts!
The Push For A Bitcoin Spot ETF Continues
The approval of the futures-based Bitcoin ETFs has not stopped some government officials from pushing for the more desirable spot ETF. Congressman Tom Emmer (R) and Darren Soto (D) wrote a powerful letter to the SEC advocating for the spot ETF yesterday. The letter is compelling, and makes it clear that spot based ETFs are superior and viable. Here is my favorite paragraph from the letter:
“Spot-based ETFs have proven more efficient and are strongly preferred by investors, as evidenced by their commercial success; we believe the same will be true for Bitcoin exposure in an ETF wrapper. For example, today investors can gain exposure to gold through both the spot based SPDR Gold Trust (GLD), which is registered under the Securities Act of 1933, or the futures-based Invesco DB Gold Fund (DGL), which is registered under the Investment Company Act of 1940. In its 15 years trading in the U.S. public markets, GLD, the largest of all the commodity-based ETFs, has not experienced any material investor protection issues and holds $55.5 billion in assets compared to DGL’s $50.4 million (less than 1% as much). Investors clearly prefer spot-based commodity ETFs over ones that hold futures.”
Shiba Inu Community Is Petitioning Amazon
3 separate petitions on Change.org asking Amazon to accept Shiba Inu as a payments option have garnered attention . As comedic as the petitions are, the turnout has been incredible, with nearly 200,000 unique signatures (likely more now). If you want a laugh, or to sign the petitions, here are their names.
“SHIB4Amazon - Ask Amazon to add SHIB as a payment"
"Kindly request Amazon start accepting SHIBA INU as a form of payment"
"Please accept Shiba Inu cryptocurrency as payment for Amazon products and services"
New York City Elects Bitcoin Mayor
New York is welcoming Eric Adams, an outspoken proponent of Bitcoin, as its newest elected mayor. During the campaign, a video went viral of Adams awkwardly mentioning Bitcoin in a speech, saying he wanted the city to be the “center of Bitcoins.” It looks like there is even some friendly competition brewing, because Adams recently said, “Miami, you had your run. We’re bringing our businesses back.”
Audi-Backed Holoride Brings Metaverse To Every Car With Elrond
The Metaverse is expanding into the automotive industry.
Audi-backed holoride is building an Extended Reality (XR) platform that integrates vehicle movements into virtual reality experiences. Not only can you stay logged into the Metaverse on the move, but you can fully immerse from the comfort of your vehicle.
In the 2.5 years since its inception, holoride has engaged in collaborations with Audi, Porsche, Daimler, and Ford, as well as heavy hitting media companies such as Universal Pictures, Disney, and Discovery Channel. They are building their NFT economy on the Elrond Network, with their RIDE token to debut on Elrond's strategic incubator, the Maiar Launchpad. Below is the original news from May that explains the partnership.
The Wolf Of All Streets Podcast Ft. Alex Krüger
THIS EPISODE WILL BE LIVE ON YOUTUBE AT 1:30 PM EDT.
Alex Krüger is a well-known crypto economist, famous for his hot takes and insightful thinking regarding all markets. He has a knack for putting crypto in the context of global markets and shared his thoughts on various topics in this whirlwind episode. He also made the case for million-dollar Bitcoin. You don’t want to miss this.
In this episode, Alex Krüger and I discussed:
Dog coin madness
Bitcoin’s macro drivers
Interest rates and FED tapering
Are we fighting deflation
Is Bitcoin a correlated asset?
Is there any upside left?
The Bitcoin futures ETF
Stablecoin regulation
Short bankers, long Bitcoin?
What is up and coming?
CBDCs are coming
What coin(s) are Alex excited about?
This episode is sponsored by: ARCULUS and KAVA
My Recommended Platforms And Tools
This is where I trade with leverage and can also trade spot with no fees.
This is where I spend my days teaching and learning! Our Discord group is a one stop shop for everything you need to learn to trade and control your emotions. Feel free to DM me on Twitter or respond to this email for questions. Code Wolfsden50%off for a 50% discount on the first month.
This is where I invest, commission-free. They now let you earn interest on your Bitcoin held in Voyager, so you can compound while trading. Not only that, you’ll get $25 in free BTC when you download & fund.
Rewards Code: WOLF25
Mining for everyone! You can buy an ASIC and have it set up at a destination of your choice by them, and you only pay the electricity cost. Absolutely awesome.
I use RoundlyX to buy small amounts of Bitcoin every single day. They automatically round up my credit card purchases (with 10x multiplier) and invest them in crypto. Absolutely brilliant. Passively invest money you don’t need without a thought. Further, they have integrated with Voyager (see above) to offer commission-free purchases.
Rewards Code: WOLF
Concierge Phone Service for Americans that protects your from SIM Swaps and other phone related hacks. I cannot stress enough how amazing this service is.
Subscribe to my YouTube channel for free daily content.
Follow me on Twitter at @scottmelker. This is where I am constantly updating my trades and sharing ideas.
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.