The Wolf Den #565 - I Did Not Expect This
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In This Issue:
I Did Not Expect This
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
Crypto Interest Rates Are Rising
Nike Leads In NFTs
It's Lawsuit Season
My Recommended Platforms And Tools
I Did Not Expect This
If I have learned anything from being a human being on planet earth over the past 2 years, it's that absolutely unexpected and seemingly impossible events are common place. Between covid, aliens, boats getting stuck in canals, clown politicians and more, almost nothing can surprise me.
Hell, I got bit by an angry sea turtle.
If you had asked me in 2017 whether we would see a loan US Representative defending an obscure crypto mixer, my answer would have been a resounding "no."
To be frank, I would have likely had the same answer for you a couple of weeks ago.
Yet here we are...
To get everyone up to speed, the U.S. Treasury Department recently announced sanctions on Tornado Cash, Ethereum’s most popular cryptocurrency mixer. A mixer - as the name implies - tumbles your coins with other coins. It is akin to a laundry machines for cryptocurrencies instead of cash. Addresses are obfuscated, giving users full privacy.
Mixers have been under heavy scrutiny from governments since they were conceived. EU authorities have already shut down Bitcoin based Bestmixer.io, and have voted to continue the crackdown on anonymity. In late 2020, Helix and Coin Ninja (popular U.S. mixers) were penalized for, “operating the two services as unregistered money services businesses (MSB).” In February 2021, U.S. Deputy Assistant Attorney General Brian Benczkowski said hiding crypto transactions with mixers “is a crime.”
Rep. Tom Emmer (R-MN) has had enough. He is taking the other side of the issue and it’s F$&KING AWESOME.
Yesterday, Rep. Tom Emmer sent a letter to Treasury Secretary Yellen in which he argued that “the sanctioning of neutral, open-source, decentralized technology presents a series of new questions, which not only impact our national security but the right to privacy of every American citizen.”
Rep. Emmer asserts that the sanctions are the first of their kind because they target something other than an entity or individual. In other words, because Tornado Cash is a smart contract platform, it is nothing more than code that is under attack.
I did an entire show on this recently, which you can watch below.
Rep. Emmer is fighting the good fight and keeping our regulators in check, which basically makes him as rare as a hot pink three-legged unicorn dancing the Macarena on Uranus. Emmer is such a believer in crypto and doing the right thing that he is risking his platform to defend a previously obscure piece of code.
I would like to say that nothing will surprise me again, but I'm sure 2022 has more shockers in store.
Bitcoin Thoughts And Analysis
DAILY CHART
Bitcoin is doing a whole lotta nada. For now, it has still held the slightly higher low. A lot of traders are seemingly looking to long a sweep of that low at $20,700, which would also likely give some bullish divergence (see Monday's newsletter).
Nothing to see here for now.
Altcoin Charts
I do NOT share signals in this section. I share setups and charts that I am watching, in an effort to help show you how I view a chart and what criteria would be necessary for me to consider taking a trade. NEVER blindly buy something because it is listed in a newsletter or posted on twitter. You need to have a plan when you enter a trade. These are just ideas, and are almost always “if, then” scenarios. If a certain set of things happen, then I would consider a trade.
ETH/USD
Be calm. I am not bearish.
That said, we have nailed the past few major moves on Ethereum, which are among the very few charts that I have shared here the past few months. The ascending triangle that formed at the bottom played out and hit it's target above $1,800. Then we had the head and shoulders and drop.
Now we have a POTENTIAL (not confirmed) bear flag forming on the 4-hour chart, with a death cross of the 50 and 200 MAs. This is a lower time frame setup, so take it with a grain of salt. Confirmation would come with a break of the lower support on the flag.
The target of that pattern, if confirmed, would be around $1,250. You find the target by measuring the length of the flagpole and taking the measured move from the point of breakdown.
I am watching $1,284 as a potential buying opportunity. This was the neckline of the ascending triangle and a key resistance. Importantly, it was never tested as support, which is something you always look for from any major resistance. It would be no surprise to see price drop here, and would still remain bullish.
I am not looking to short, although shorter time frame traders might do so if the potential bear flag breaks down.
I am not sharing this for you to short Ethereum. I am sharing so that you can go ahead and place "stink bids" now in case there is a major drop. If it never hits, great. If you catch a solid long term entry, better.
We often see a wick down to support and price trading there briefly.
Legacy Markets
The Federal Reserve Bank of Kansas City hosts dozens of central bankers, policymakers, academics and economists from around the world at its annual economic policy symposium in Jackson Hole, Wyo. Symposium participants include prominent central bankers, finance ministers, academics, and financial market participants from around the world. The participants convene to discuss the economic issues, implications, and policy options pertaining to the symposium topic. The symposium proceedings include papers, commentary, and discussion.
The 2022 Economic Policy Symposium, "Reassessing Constraints on the Economy and Policy," will be held August 25-27.
This is the event that markets are waiting for...
What to watch this week:
US durable goods, MBA mortgage applications, pending home sales, Wednesday
US GDP, initial jobless claims, Thursday
Kansas City Fed hosts its annual economic policy symposium in Jackson Hole, Wyoming, Thursday
ECB’s July minutes, Thursday
Fed Chair Powell speaks at Jackson Hole, Friday
US personal income, PCE deflator, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
Futures on the S&P 500 were little changed as of 6:04 a.m. New York time
Futures on the Nasdaq 100 were little changed
Futures on the Dow Jones Industrial Average were little changed
The Stoxx Europe 600 fell 0.1%
The MSCI World index fell 0.2%
Currencies
The Bloomberg Dollar Spot Index rose 0.1%
The euro fell 0.3% to $0.9945
The British pound fell 0.3% to $1.1801
The Japanese yen rose 0.2% to 136.51 per dollar
Bonds
The yield on 10-year Treasuries was little changed at 3.04%
Germany’s 10-year yield advanced three basis points to 1.35%
Britain’s 10-year yield advanced five basis points to 2.63%
Commodities
West Texas Intermediate crude rose 1% to $94.66 a barrel
Gold futures were little changed
Crypto Interest Rates Are Rising
Interest rates are rising across crypto platforms. After the collapse of Celsius, Voyager, and other lending platforms, borrowers now have fewer options when seeking loans.
BlockFi’s global head of trading said it well: “it’s now much more of a lender's market than a borrower’s market, back then [May] it was more of a borrower’s market.”
Some of the major firms to raise rates in August include, BlockFi, Gemini, and Crypto.com, although I still wouldn't recommend holding anuy significant portion of your crypto on these platforms.
Nike Leads In NFTs
The NFT hype among some of the most sought-after fashion brands may not fade anytime soon after all.
Nike is making bank in the NFT market, showing that it is possible for major companies to earn significant revenue in the digital space.
The other mainstream competitors barely put up a fight. It wasn’t even close. Nike has brought in $185 million in revenue, with Adidas at $10.94 million. Remember Tiffany’s Punk necklaces? Well, Tiffany has brought in $12.62 million and Dolce and Gabanna $25.65 million.
CloneX and MNLTH are Nikes most notable and profitable collections.
It's Lawsuit Season
How can you tell we are in a bear market without looking at prices? Count the number of lawsuits. Celsius is suing their associate DeFi company, KeyFi, for misrepresentation, incompetency, and deceit. According to Celsius, KeyFi lost Celsius, "many tens of millions," because they stole coins and went NFT shopping. The allegations are insane.
The Celsius suit comes several weeks after KeyFi sued Celsius for "failing to honor a profit-sharing agreement?" Supposedly, KeyFi was also using Tornado Cash to hide their transactions. the story is nut and it is impossible to know who to believe. Regardless, it looks like Celsius had monkeys in charge of their risk department because their negligence was through the roof.
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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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