The Wolf Den #401 - SBF On The State Of The Market
Bitcoin Thoughts And Analysis
As I eluded to in the intro, there's really nothing to see here. I know that you expect charts and ideas, and I will continue to share them. But just be reminded that I really don't see any reason to actively track Bitcoin right now until it is above 53K or below 42K. Everything else is chop.
DAILY CHART
Today has seen some selling, still on minimal volume. Perhaps price is coming back to retest the descending black line or the 200 MA below.
You may remember that I jokingly drew this a few weeks ago, saying that it would drive people insane. While I doubt we are here this long, you can see that the idea is right - sideways chop after that massive drop.
4-HOUR CHART
Ranging sideways. Predictably, the community was bullish yesterday, right at the range highs and significant resistance. That's what humans do - they get bullish at resistance and bearish at support. Above this range would give some hope at a retest of the 53K area, but for now we are chopping.
Altcoin Charts
BTC DOMINANCE
I have no setups to share today, as the market continues to chop sideways and is difficult to trade. After sending yesterday's newsletter, I took a quick look at Bitcoin Dominance. First, charting dominance is a meme, because there are no buyers and sellers to create support and resistance. It can still give us a look at what's happening.
As you can see, dominance has visited this same level three times this year. The previous two times, it bounced, hurting altcoins relative to Bitcoin. This is a signal that we should exercise caution with altcoins here, because any meaningful rise in dominance will hurt them on their Bitcoin pairs. If Bitcoin goes up with dominance, then alts will likely lose value against Bitcoin but retain it against USD. If Bitcoin goes down and dominance rises, it will likely be a slaughter on both pairs. Keep this in mind when managing risk.
Legacy Markets
SPX (S&P 500 INDEX)
Stocks only go up.
While this statement sounds like a meme and impossible, it has proven true time and time again. There has never, in history, been a bad time to invest in the stock market with a long time horizon. The S&P 500 made it's 69th new all time high... this year.
Even in the face of hawkishness from the Fed, tapering and impending interest rate hikes, the market has continued to rise.
There WILL be a correction, another depression or recession. The price WILL drop. Timing it is a fool's errand and nearly impossible. More importantly, when it happens, it will likely be one of the greatest buying opportunities of a generation. Even the Great Depression was a boon for cash rich investors. When the dip comes, you buy it, unless you think this time will be different.
TSLA (TESLA)
Tesla offered a perfect entry on the retest of the previous all time high as support. I drew and circled it many weeks ago and shared it here as a trade. If you missed that, it is currently approaching descending resistance. I would not buy this now, but a break of that resistance should send it to new highs. Set an alarm.
Is Your NFT Rare?
It is extremely difficult to evaluate the value of a collection of NFTs . Rarity is discussed in abstract terms, focusing on the garments an ape is wearing or the hairstyle a punk is donning. If you didn't know, these are the features that determine an NFT's rank and rarity and make understanding their importance makes it easier to evaluate whether an NFT is fairly priced. If you are buying an NFT because you love the artwork, the rarity score shouldn’t matter as much. But if you are buying the NFT as an investment and it’s from a collection, the score can easily be determined by visiting the site above. You should also familiarize yourself with the purchase history and entire range of attributes to make the best possible investment. An NFT without a purchase history poses a higher risk. Perhaps it’s a gem and you are the first to discover it... or it’s a piece of junk that nobody wants. That is a determination that only you can make. As an investor, you should always air on the side of caution. The majority of NFT projects fail and many are never fully minted.
Announcements Incoming
With the year coming to an end, crypto holders should begin to look for signs of health in the projects they support via announcements from the teams. This is the most popular time for projects to clear the air on any lingering controversy, revisit roadmaps, and tease reveals for the new year. If the end of the year passes without any word from the team or project founder, it might be a sign of poor project health.
As exciting as it is to rally behind bullish announcements, take them all with a grain of salt. It’s general consensus that we are still in a bull market, but most likely through at least the first half. This adds additional pressure for projects to put out their best work and capture as much value before the cycle ends.
Linked above is a video of Charles Hoskinson, Cardano's founder sharing his 2022 plans. All Cardano holders should watch.
The Wolf Of All Streets Podcast Ft. Matt Kalish
Matt Kalish is the co-founder and current President of DraftKings North America. He has a deep-seeded passion for sports, technology, entrepreneurship, crypto, and analytics. Matt was an early NFT adopter and gifted his friends his favorite jpegs, which soon became coveted and valuable, effectively converting everyone around him into NFT bulls and collectors. Today, Matt spends his time innovating at the crossroads of sports betting, blockchain, NFTs, and the metaverse, capturing some of our decade’s greatest trends and technologies.
In this episode, Matt Kalish and I discuss:
The Regulation Process For Sports Betting
Regulation In Crypto And Gambling
Asset Empowerment
Buying Punks Early
DraftKings Adds NFTs
iGaming, Metaverse, and Play-To-Earn
A Wealth And Power Shift
Crypto Hit Escape Velocity
Is Crypto Trading Like Gambling?
The Bitcoin And Ethereum Rabbit Hole
Exploring NFTs And Yield Farming
This episode is sponsored by: AMBER GROUP, HORIZEN, and HBAR FOUNDATION
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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.