The Wolf Den #563 - Is Crypto A Religion?
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In This Issue:
Is Crypto A Religion?
Bitcoin Thoughts And Analysis
Legacy Markets
FTX Catches Heat From The FDIC
Are NFTs On The Brink Of Collapse?
Dan Gunsberg Disrupts The Derivatives Markets And Expects Billions Of Dollars Into Crypto
My Recommended Platforms And Tools
Is Crypto A Religion?
What a time to be alive.
Watching an asset class mature in real time at the speed of technology is a treat that previous generations have rarely had the opportunity to experience. Most assets takes decades and centuries on their path to monetization, while Bitcoin and Ethereum have taken a few years.
Gold is perhaps the most similar asset, but its journey took centuries. Bitcoin and Ethereum are becoming legitimate in record time.
The path to monetization has varied from currency to currency, but there have been a few constants that affect how an asset transitions through the stages of monetization. These factors include monetary premiums, game theory, and utility.
I would have to write a book to cover these separate variables. I am also not qualified to write said book. For now, I want to focus on what happens to be the muddiest and most unique factor affecting Bitcoin and Ethereum's path.
It’s religious fervor.
I have been an outspoken critic of pundits in the path that have deemed Bitcoin as a religion.
But they're not completely wrong.
Because crypto markets are widely open, available and revolutionary, participants are not merely dispassionate observers - they are active evangelizers. Sentiment drives everything, and this starts with the truest believers.
When it comes to crypto, jumping up on our soap boxes makes sense. Objectively, there currently is no form of true global money, so sharing what makes us special turns out to be an effective strategy for driving adoption. Until Bitcoin and Ethereum find a natural and steady fit for demand, the proselytizing will persist.
Leigh Drogen’s comments on Bitcoin work well here: “if you read the book Sapiens, then you recognize this as a religion – a story we all tell each other and agree upon. Religion is the adoption curve we ought to be thinking about. It’s almost perfect – as soon as someone gets in, they tell everyone and go out evangelizing. Then their friends get in and they start evangelizing.”
As irrational as all this seems, it's not too crazy for an individual to preach about the superiority of Bitcoin or Ethereum and for society to take notice. After all, that's exactly what I am doing here.
Money is the foundation of everything, which is why we say, “Bitcoin fixes this" in the first place. It comes across as a cult-like idea, but it is based in truth and is the very reason that we stick around. Fix the money, fix the world.
Now go say your 3 Hail Satoshis and get back to work.
Bitcoin Thoughts And Analysis
WEEKLY CHART
The 200 MA is resistance once again. Not ideal.
After holding above that red line for 3 weeks, price nuked below as if it was not even there. Welcome to trading.
Bitcoin is sideways, trading in a large range after forming a potential bottom in the 17Ks. Not much to see here otherwise.
DAILY CHART
If you are looking for some positive news, at the moment Bitcoin has still made a slightly higher low on the way up, because it did not break $20,700. Bullish market structure from the lows is still intact, with a series of higher highs and higher lows.
As you can see, all of the tops have had ugly candles with long upper wicks, some which would be identified as shooting stars. This is where bulls have clearly lost their momentum and bears have laid the smack down. Keep watching for this.
The daily 50 MA is once again resistance.
4-HOUR CHART
This is just an idea, and one that I have shared literally every single time that RSI has gone oversold for the past few years. It does not mean it will happen. But if it does, I will be taking notice.
4-Hour RSI hit 13, absurdly oversold. That was a great place to play a bounce. Now I will be watching for bullish divergence with RSI, which would require a slightly lower low on price with RSI making a higher low. That would be a very solid reversal signal.
Legacy Markets
What to watch this week:
US new home sales, S&P Global PMIs, Tuesday
Fed’s Neel Kashkari speaks at Q&A session, Tuesday
US durable goods, MBA mortgage applications, pending home sales, Wednesday
US GDP, initial jobless claims. Thursday
Fed annual policy symposium in Jackson Hole, Wyoming, Thursday
ECB’s July minutes, Thursday
Fed Chair Powell speaks at Jackson Hole, Friday
US consumer income, PCE deflator, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 1.2% as of 10:31 a.m. London time
Futures on the S&P 500 fell 1.2%
Futures on the Nasdaq 100 fell 1.6%
Futures on the Dow Jones Industrial Average fell 1%
The MSCI Asia Pacific Index fell 0.6%
The MSCI Emerging Markets Index fell 1%
Currencies
The Bloomberg Dollar Spot Index rose 0.2%
The euro fell 0.3% to $1.0008
The Japanese yen rose 0.1% to 136.82 per dollar
The offshore yuan fell 0.3% to 6.8573 per dollar
The British pound fell 0.2% to $1.1810
Bonds
The yield on 10-year Treasuries was little changed at 2.96%
Germany’s 10-year yield was little changed at 1.22%
Britain’s 10-year yield advanced two basis points to 2.43%
Commodities
Brent crude fell 1.1% to $95.68 a barrel
Spot gold fell 0.8% to $1,732.30 an ounce
FTX Catches Heat From The FDIC
If there is one thing that we have learned from the recent Voyager fiasco, it’s that transparency and clear communication regarding insurance really matters. FTX.US just received a slap on the wrist from the FDIC for what appears to be an honest mistake from Brett Harrison. The original tweet that caused the issue read as follows: “direct deposits from employers to FTX US are stored in individually FDIC-insured bank accounts in the users’ names” and “stocks are held in FDIC-insured and SIPC-insured brokerage accounts.”
From the FDIC’s perspective, the statements above give off the impression that uninsured products are insured by the FDIC. But in fairness, the Tweets were in response to something particular regarding a product that was, in fact, insured. Confusing.
The FDIC is clearly stepping up now after the recent crash, which is not necessarily a bad thing. They likely feel some level of responsibility for failing to protect consumers.
Are NFTs On The Brink Of Collapse?
Concerns around the NFT market have started to grow as floor prices have dumped.
If you haven’t heard of BendDAO, it’s an “NFTfi” marketplace that allows users to take loans against their NFTs. This platform is one of a few that allows NFT depositors to borrow up to 40% of a collection’s floor price and lock in an interest rate on their NFT loan. It sounds smart, but the idea is way ahead of its time.
The NFT market is more volatile than the coin market, so the possibility of cascading liquidations is much higher. As fear mounts, floor prices drop, and more users come that much closer to being liquidated.
Until NFTs find more stable values, taking loans against them is not smart unless you are ready to lose it all.
Here's more on the story.
More NFTs on BendDAO’s health factor alert list are about to default and be put into auction.
Dan Gunsberg Disrupts The Derivatives Markets And Expects Billions Of Dollars To Flow Into Crypto
When’s the last time you watched a podcast recorded on a driving range? As a 20+ year veteran of the derivatives market, Dan Gunsberg knows that business is done on the golf course. Well, now he’s at the driving range talking crypto. Dan is the CEO and Co-Founder of Hxro Trade, a platform built on Solana for trading crypto options, that hopes to be the home for clearing, risk, settlement, and exchange for the entire DeFi market.
In this episode with Dan, we discussed:
Golf with Dan Gunsberg Intro
Links DAO
Crypto Is 24-7-365
Building Hxro in a Bear Market
What is Hxro?
The Future of Derivatives and DeFi
Regulation Roadmap
Institutional Investment
Monopolies Are Breaking Down
3-5 Year Outlook for Crypto
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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.
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