The Wolf Den #526 - Ignore Price
Get up to a $5,000 bonus in USDT when you sign up using my link to Bitget! Bitget is the best crypto exchange for both spot and leverage, world’s largest crypto copy trading platform, and the official partner of Juventus Football Club. They are also offering a 15% discount on trading fees!
In This Issue:
Ignore Price
Bitcoin Thoughts And Analysis
Legacy Markets
Bad News For Bancor
The SEC Approved What?!
Celsius Short Squeeze?
The Wolf Of All Streets Podcast Ft. Mark Yusko
My Recommended Platforms And Tools
Ignore Price
Last week, the majority believed that any price above $20k was your last chance to sell before things went to hell.
This week, the majority believes that any price below $20k is your last chance to buy at the bottom of the bear market.
With just a little bit of price action to interpret and no material changes in the news, almost everyone seemingly shifted to the opposite side of the boat.
But the boat is the same and the seas are still rough.
There is still a chance that the Fed raises rates by 75 or 100 basis points.
Repeatedly.
A recession is inches away (or here already).
Inflation can still rise.
Housing prices are sitting on a cliff.
And we all know that the COVID narrative can return any day.
The list goes on - Russian sanctions, the war in Ukraine, China's lockdown, supply chain issues and Monkey Pox.
Monkey Pox!
There's no reason for sentiment to shift so sharply, simply because price zigged and zagged. Eventually there will be a bottom, and everyone that bought along the way will be rewarded. Flip-flopping emotions are a distraction, especially if you are buying as an investor for the long term.
How will you feel if Bitcoin drops to $15k? 10k? Both will be buying opportunities for me and neither is a time to panic. Zoom out.
There's no way to change the macro environment, or the fact that crypto is at the mercy of global events.
Contagion from within is still a real threat.
But all of this will eventually end.
Crypto will likely be the first market to bottom. It's our canary in the coal mine. This happened in March, 2020, although there are no guarantees that history will repeat.
Be patient, don't change bias with the wind and take a long term approach.
Bitcoin Thoughts And Analysis
I ran a simple poll on twitter yesterday to gauge sentiment, and 70% of the respondents believe that the bottom is not yet in for the crypto market.
Is this an easy countertrade or is this a case where there is wisdom in the crowd?
The crowd is usually wrong, but I do not believe we have enough information here yet to draw any meaningful conclusions. The global market situation is far too rocky to determine clearly whether we have a bottom, but the possibility should at least be considered.
WEEKLY CHART
Bitcoin is arising alongside global markets today, a continuation of the sizable bounce from Sunday, which was further follow through on Monday.
Notably, we have a perfect retest of the 2017 high as support on this week's candle... but it is only Tuesday and too early to call it a true retest.
For now, things look decent at least for a move up to the 200 MA to backtest it as resistance. A break above that red line this week would mimic what we saw in 2020 - a brief break below and then a bottom. That's what we want, but not sure it is what we will get.
We need more information and time to determine what likely comes next.
Legacy Markets
What to watch this week:
Fed Chair Jerome Powell semi-annual Senate testimony, Wednesday
Bank of Japan April minutes, Wednesday
Powell US House testimony, Thursday
US initial jobless claims, Thursday
PMIs for Eurozone, France, Germany, UK, Australia, Thursday
ECB economic bulletin, Thursday
US University of Michigan consumer sentiment, Friday
RBA’s Lowe speaks on panel, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 1% as of 9:44 a.m. London time
Futures on the S&P 500 rose 1.8%
Futures on the Nasdaq 100 rose 2%
Futures on the Dow Jones Industrial Average rose 1.6%
The MSCI Asia Pacific Index rose 1.5%
The MSCI Emerging Markets Index rose 1.4%
Currencies
The Bloomberg Dollar Spot Index fell 0.4%
The euro rose 0.6% to $1.0573
The Japanese yen fell 0.2% to 135.33 per dollar
The offshore yuan was little changed at 6.6940 per dollar
The British pound rose 0.5% to $1.2317
Bonds
The yield on 10-year Treasuries advanced five basis points to 3.27%
Germany’s 10-year yield was little changed at 1.75%
Britain’s 10-year yield declined one basis point to 2.59%
Commodities
Brent crude rose 1.4% to $115.72 a barrel
Spot gold fell 0.2% to $1,835.78 an ounce
Bad News For Bancor
The Bancor protocol, a DeFi AMM, decided to pause its impermanent loss feature. I’ve written about impermanent loss before. It’s a phenomenon that occurs when deposited balances in a liquidity pool deviate in their value. In an effort to protect their liquidity and maintain the integrity of the pool, LPs often lose money.
The move by Banco has led speculators to state that Bancor is printing tokens to cover their asses. These newly printed tokens inflate the supply and offer a chance for users to sell as their coins are devalued, causing the price to drop further and induce more printing.
The official word from Bancor stated that the decision was due to, “hostile market conditions,” and “anomalies, if not manipulative behavior, occurring in the data.” Even if there was a manipulated attack, it doesn’t excuse poor money management or high-risk design. I guess time will tell if this is FUD or an actual concern, but it is something to keep an eye on.
The SEC Approved What?!
If ever there was doubt as to the SEC's views on crypto, I think we finally have some clarity. And it ain't good!
The SEC has officially approved $BITI, a short Bitcoin strategy ETF. On the long side, we have a futures ETF and a fund with a 34% discount to NAV, but no spot ETF. For the record, I find it completely acceptable for investors to use these options, but abhorrent for the SEC to deny a superior product in the spot ETF.
Celsius Short Squeeze?
This be an epic way for Celsius to recover, but don't get your hopes up. Rumblings of a mega short-squeeze are starting to spread, but that doesn’t mean you should join. The idea is community-led and has no official support. I personally won't be taking part in any Celsius trading.
The Wolf Of All Streets Podcast Ft. Mark Yusko
When your favorite retail store has a sale you run towards it. So why do investors run the other direction when the market has a sale? Mark Yusko, Co-Founder & Partner of Morgan Creek Digital, sees market drops as an incredible opportunity. We talk more about the opportunity in dips, the amazing talent migration into crypto, and how we will soon start monetizing our attention and focus. Mark also shares 3 important tips for staying calm. This episode is full of incredible soundbites that you don’t want to miss.
In this episode with Mark, we discussed:
About our guest Mark Yusko
The Futures ETF
The “then they fight you” stage
Investing: the only sale people run from
Why Warren Buffet is a genius
Long-term plays and price watching
Old world innovation vs new world innovation
Favoring innovation: we as a country have a choice
The talent migration into crypto
Monetizing our attention and focus
Technology always starts at the fringe
Volatility sucks, but we’ve already won
How Mark stays calm
Marks Shirt, Marks socks, and an obligatory howl
Thanks to VAULD and MERCURY for sponsoring.
My Recommended Platforms, Tools And Podcast Sponsors
Proud sponsor of The Wolf Den Newsletter. The world's biggest crypto copy trading platform, up to a $3000 bonus for signing up.
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.
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.
I have chosen Bullish as a sponsor for both my podcast and livestreams! They are an awesome exchange that incorporates all of the benefits of both centralized and decentralized exchanges. Your keys, your coins, but with a robust order book, complex orders and deep liquidity.
Vauld are sponsoring both my podcast and livestreams and have become my personal platform of choice for holding coins and earning yield. I love their rates (12.68% on Stables and 6.7% on BTC and ETH) and their buy the dip feature that automatically buys for me when price drops.
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.
IF YOU HAVE ANY ISSUE WITH THE NEWSLETTER OR YOUR SUBSCRIPTION, PLEASE CONTACT: PREMIUMSUPPORT@GETREVUE.CO