The Wolf Den #477 - The War On Interest
What’s Next For Bitcoin? 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 next for Bitcoin?
On-chain data can help us determine key areas of buy/sell pressure based on historical trading activity. IntoTheBlock’s In/Out of the Money indicators groups clusters of addresses depending on their average cost of purchase, providing an indication of the price levels that are expected to act as support or resistance.
IntoTheBlock’s Bitcoin financial stats
Bitcoin is currently facing major resistance. 698k BTC were previously acquired just above $40,000 which is expected to act as a major point for sellers prior to potentially aiming for new highs
On the support side, Bitcoin is currently at a crucial support level between $38,800 — $39,700, where 1.1m addresses previously acquired over 750k BTC
If this level were to break, there could be some buying activity at $37,000. Failing to hold this, we could revisit the recent lows.
USDN’s De-Pegging
This week we saw algorithmic stablecoin USDN lose its peg by over 20% as UST reached a new all-time high market cap of $16.7 billion. Despite the contrasting outcomes, USDN and UST are not too dissimilar.
A tweet started to circulate accusing the Waves team of using Vires to inflate its numbers by lending USDN, borrowing USDC, transferring to an exchange to buy WAVES and increase its price, and exchange WAVES for USDN when needed.
Yield Farmers Withdraw — as the allegations on USDN came out, it appeared that depositors of the USDN Curve pool began exiting
The Curve pool which is supposed to be 50% USDN and 50% 3Crv (USDC, USDT and DAI), became over 90% USDN
Withdrawals led to lower liquidity, exacerbating the USDN crash
Be careful out there and always remember that we are experimenting with new ideas. Things will break.
Bitcoin Thoughts And Analysis
Bitcoin is still trading at roughly the same price as yesterday, in roughly the same situation. No need to share a bunch of charts when little has changed.
4-HOUR CHART
Price confirmed bullish divergence with oversold RSI on the 4-hour chart, which you know is my favorite signal. That said, these can build over time, and we have immediate potential hidden bearish divergence that would effectively invalidate the bullish case for now. The hidden bearish divergence would be confirmed for me with a clearer elbow down on RSI and price.
I do think we are likely starting to bottom here, but I have no better ability to guess than anyone else.
Elon Musk Wants Twitter
The Elon Musk Twitter saga has taken an unexpected turn - a hostile takeover is now back on the table. What started as peaceful cooperation between Elon and Twitter has become a war on free speech.
The story started when Elon Musk bought 9.2% of Twitter through common stock and earned himself a seat on the board of directors. The back story is that Elon enjoys Twitter but recognizes its faults ie. falling stock prices, failing functionality, and what he believes are limitations on free speech.
The immediate reaction to Elon’s purchase fro Twitter insiders was largely negative. Twitter employees felt threatened and many viewed it as an attack on healthy censorship. I’ll let you decide for yourself on this one. Either way, Elon has now decided that a board seat isn't in his best interest and instead filed to purchase more shares. Had he accepted the board seat, his ownership would have been capped. Now there is no cap. A takeover is possible.
In typical Elon fashion, he started firing off Twitter polls, some being harmless and others taking the form of subtle and not-so-subtle jabs. Most infamous to date was Elon's suggestion to “convert Twitter SF HQ to homeless shelter since no one shows up anyway,” complete with a yes or no response option. The response was an overwhelming yes. Jeff Bezos commented in support, giving an example of how the Seattle Amazon HQ is quite literally already doing this.
What a time to be alive.
The news has caused quite the stir for Twitter. Employees were given a day off and executives are now in a rush to see what the community wants. Elon clearly doesn’t see himself fitting into this company, meaning it will either be his to control or his to leave. He is a man of extremes.
Elon appears to be winning. Plus, Twitter shares have been dropping from all of the commotion, which might just create the perfect storm for Elon to swoop in.
Get the popcorn ready!
Ethereum 2.0 Makes Quiet Progress
The shadow fork will stress test developers' assumptions on existing testnets and the mainnet.
The Ethereum community has achieved another important milestone on the path to 2.0. Implementation of Ethereum’s first-ever mainnet shadow fork went live to stress test what’s to come. Essentially, the stress test was the hardest test the network has seen to date, basically simulating Ethereum 2.0 before it arrives. According to one developer, the test was a “historical event” and “key in determining the timing of the final merge.”
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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.