The Wolf Den #463 - Leveling Up
Ethereum Progresses Towards Key Catalysts - 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 Progresses Towards Key Catalysts
While investors’ attention has been glued to macro news, the crypto space continues to progress in key areas. A perfect example of this can be seen with Ethereum successfully launching a testnet for its much-awaited merge of the proof of work and proof of stake chains. This took place just a few days after Ethereum staking reached another milestone.
Via IntoTheBlock’s Ethereum staking indicators
10 Million ETH — 8-figures of Ether are now deposited into the proof of stake contract
This represents approximately 8.3% of all ETH in circulation
The amount of ETH staked has grown by 20% in the last 90 days and 10% in the past 30 days alone
Despite network activity continuing to drop, savvy investors appear to be taking note of the progress with ETH 2.0.
At the same time, since the EIP 1559 implementation, the cumulative ETH that has been burned reached another major milestone recently.
ETH continues to be burned - over 2 million ETH has been taken out of circulation in just 9 months.
This started with the implementation of EIP 1559, as part of the fees are burned
As NFT volumes peaked in January, Ether’s net issuance dropped to historic lows of nearly -2%
Following the merge the amount of ETH issued is projected to drop by 90%, which would lead similar levels of fees to reduce Ether’s supply by as much as 5% a year
Bitcoin Thoughts And Analysis
There's nothing to look at on the chart. Nothing has changed since yesterday.
Here are your key levels - 53K, 45.5K, 42K, 39.6K
The larger the time frame close above or below, the more meaningful.
Right now, there's a battle for the 42K level, where price has effectively traded around since January of 2021.
That's it, we will revisit tomorrow.
Never Add To A Losing Trade
Investing and trading are different! Investors average down positions in fundamentally sound assets with a long-time horizon. The very best patiently wait and aggressively purchase assets when nobody else wants to.
Traders have defined levels of risk and invalidation for their trades. The very best are vigilant and develop their own methods around their unique set of skills. When their stop loss hits, the trade has been invalidated and they move on to another asset. Period. Never average down as a trader unless it was part of the original plan. If you are losing on a trade, cut it at your stop loss. If you are losing on an investment, buy more or sit tight.
El Salvador Postpones Bitcoin Bonds
Not ideal. While it makes sense to delay the bonds while the global market is melting down in the face of a geopolitical crisis, this will give critics of El Salvador's move to a Bitcoin standard more fuel.
"El Salvador’s delay of the Bitcoin bond launch comes amid the government apparently slowing down the pace of buying new BTC as well. Previously reporting consecutive Bitcoin purchases at least each month, the Salvadoran government has not announced a new buy since January 2022."
It will be interesting to watch this play out, as now there is increased skepticism that the bond will launch at all.
Will Honduras Make Bitcoin Legal Tender?
Rumors are circulating that Honduras will be the second country in Central America to adopt a Bitcoin Standard. The President of Honduras, Xiomara Castro, had this to say.
“We must not allow El Salvador to be the only country escaping dollar hegemony. Honduras has the right to move towards the First World countries.“
This is pure conjecture, floated on twitter by notorious hyperbolic Bitcoin bull, Max Keiser. We will see soon enough whether this is happening or not.
Florida Is Becoming Crypto Friendly
During the signing of a financial literacy bill, Florida Governor Ron DeSantis spoke about crypto and Bitcoin. DeSantis said that he has guided state agencies to prepare themselves to accept cryptocurrency. "We are working – and I've told state agencies – figure out ways where if a business wants to pay tax in cryptocurrency to Florida, we should be willing to accept that."
He also mentioned that he wants to allocate a portion of the state's budget to exploring the usage of blockchain technology for state functions. Desantis also showed disdain for CBDCs, calling them "federally controlled hazards."
If enough states legalize accepting crypto for taxes and make other moves towards adoption, the possibility of it becoming accepted at a federal level increases dramatically.
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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.