The Wolf Den #452 - Know The Value Of Your Dollar
What's Going On With Cardano? 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.
What’s Going On With Cardano?
Contrary to what was discussed about some Bitcoin institutions decreasing their holdings, Cardano whales appear to be accumulating.
IntoTheBlock’s new Cardano ownership indicators
The group holding between 1M and 10M ADA reached record aggregate holdings of 12 billion ADA, worth north of $10 billion
Interestingly, these addresses had previously sold a large amount of their holdings right before ADA began to crash
Following a 70% correction these addresses have now been accumulating aggressively
This group, as well as those holding over 100M ADA, recorded double-digit growth month over month, as they now hold roughly 25% of the circulating supply.
As well, the balance held by HODLERS - addresses that have held the asset over a period of one year, is currently at a multi-year high.
IntoTheBlock’s new Cardano ownership indicators
As we have mentioned before, Hodlers tend to reduce their positions when the price is approaching all-time highs and accumulate again as the price starts to decrease.
Since July of 2021, the balance held by these addresses increased by roughly 300%.
YTD, they are approaching 36% gains.
One factor behind the recent bullishness on Cardano may be the increasing development of its decentralized finance (DeFi) ecosystem, as the TVL has recently surpassed $130 million for the first time.
As Cardano is showing signs of development within its ecosystem, whales and long-term holders have started to accumulate aggressively.
Bitcoin Thoughts And Analysis
Bitcoin made a beautiful move over night, above 42K once again. If you missed the news, Janet Yellen and the Treasury Department ACCIDENTALLY released a statement on the upcoming executive order, which many are pointing to as the reason for the move up. You can see the statement in the tweet below, which makes it clear that crypto will be regulated but innovation will be protected - exactly what we want. This is very good news, and was the most logical direction.
I closed my long yesterday in profit, but clearly missed the larger move that came later. After adding to my trade on the drop, I saw hidden bearish divergence once again confirming on the 4-hour and decided to close and take profit. This did not play out, which is a good thing.
I took a smaller win on a larger position, rather than a larger win earlier on a smaller position, which is not ideal. This is a trade that I will personally go back and journal and review.
I am never unhappy when I make money on a trade, regardless of what happens after. Also, I am massively long Bitcoin at all time with my spot holdings, and the trades are a fraction of that size.
DAILY CHART
Bitcoin has been a chop fest of massive proportions, making huge "bart" moves back and forth, passing through key levels with ease and making trading difficult. This is what ranging looks like, and it's painful.
The 50 MA has offered little support or resistance of late - usually a key line that traders look at for trades. As you can see, price is right back at 42K, where it has effectively been trading around for over a year.
From a pattern perspective, there are two ways you can arguably look at the price action. The blue ascending channel and an ascending triangle, shown by the horiztonal line as the neck and the higher lows below.
The ascending channel is not a bear flag to me here - there's not clear flagpole and the channel is too large. I prefer the idea of an ascending triangle, with a flat top at $45,500 or so and higher lows along the bottom.
The key is the break above that blue line, where price continually is being rejected.
Holding 42K should at least target the $45,500 area, so that's what I am watching for on the daily close.
Altcoin Charts
BITCOIN DOMINANCE
Bitcoin has made a nice move today and altcoins have followed to a smaller degree on their USD pairs. Still, Bitcoin Dominance just made a new local high and appears to be ready to explode up. That means that altcoins are continuing to lose value against Bitcoin. To me, that means to just sit in Bitcoin for now and wait it out. Altcoin charts against Bitcoin do not look great, so this is still a subpar altcoin market for the moment.
More Clarity Is Coming On Stablecoins
According to an inside source, bills focusing on stablecoins are slated to be rolled out this month by both the House and Senate. The President’s Working Group is behind the guidance, and members from both sides of the aisle are in support, save some outliers on the left. Considering the current macro uncertainty looming in the world, a little bit of clarity on crypto would be a nice change of pace.
Big Tech Fails, Again
A few websites including Spotify and Discord suffered simultaneous outages.
Big tech has one again had an outage affecting multiple sites. Yesterday, it was Spotify, Discord, Wikipedia, Amazon, and a number of other major platforms - with the first two shutting down entirely. I’ll be the first to admit that crypto isn't ready for mainstream adoption, but the good thing about true decentralization is that the technology tends to only fail in silos. You’ll likely never see individual blockchains out at the same time.
Bitcoin 2022 Is Nearing
If you’re considering the trip to Miami for this year’s Bitcoin 2022 annual conference, the time to buy tickets at a decent price is quickly evaporating. Since the last conference, a lot of macro events have unfolded making this conference feel more important than ever. Inflation picked up at a rapid pace, Covid variants sprung up, Canada challenged financial freedom, Ukraine asked for crypto donations, and economic sanctions are pressuring nearly 150M innocent Russian citizens. All of these global challenges and ideas will merge together at Bitcoin 2022, for what will likely be the most important conference to date. Plus, you can hang out with me.
Cryptoland Comes To Vice News
Vice News has always been one of my favorite networks for global affairs and under-reported stories. I actually worked there briefly in 2005.
"The series covers everything from the billionaire early investors of Bitcoin to Bitcoin mines and climate change as well as ransomware and Liberland, a libertarian micronation where a new society built around cryptocurrency exists. Cryptoland is one of the first comprehensive series to go into the field and show how cryptocurrency is not just impacting culture, finance, and politics, but also the broader infrastructure and design of our world. Cryptoland is the explainer you’ve been wanting and the deep-dive you need."
My Recommended Platforms And Tools
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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.
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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.