The Wolf Den #627 - Bitcoin Is The Threat
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In This Issue:
Bitcoin Is The Threat
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
Coinbase Wallet Will No Longer Support These Coins
Bitfront Exchange Announces Shutdown
Brazil Is Paving The Way For Adoption
My Recommended Platforms And Tools
Bitcoin Is The Threat
Have you ever tried explaining Bitcoin to someone, only to immediately realize that you are speaking a language that is practically foreign? I’ve been in this industry for over half of a decade and still find myself getting lost in the complex jargon and industry speak, making it nearly impossible to explain my passion to someone with zero knowledge of the space.
"The more I learn, the more I realize how much I don't know."
Thank you, Einstein.
As experts, it is essential that we understand the questions and doubts from non-believers, skeptics, and newcomers. Listening to them allows us to learn where the obstacles to adoption lie, so that we can do a better job explaining our ideas. It might be obvious to us that 6.25 Bitcoins are mined per block every 10 minutes which creates the blockchain, but to the everyday person, that sounds nonsensical.
How about this statement: “the proof-of-work involves scanning for a value that when hashed, such as with SHA-256, the hash begins with a number of zero bits.” This was taken directly from the Bitcoin whitepaper. Even some experts have trouble decoding this sentence.
The language we use is as cryptic as the technology. Learning that language is a daunting task. We need to work much harder to simplify the vernacular for the masses.
Ok, that's one issue.
But my intention here isn't to further discuss Bitcoin’s complicated jargon or tech. I want to talk about the existential threats and questions that most people still have about Bitcoin. These amorphous ideas are the reason we have not advanced further down the spectrum towards adoption.
An existential threat is a threat to something's existence. An existential question is a deep, philosophical question concerning the nature of someone or something's existence. “What is the meaning of life?” is an example of an existential question.
Have you ever heard someone present one of the following questions?
Why does Bitcoin need to exist?
What is the purpose of Bitcoin?
How will Bitcoin preserve its ethos and live up to its founding promise?
Does Bitcoin fix _______?
Is Bitcoin a universal good?
There are countless books and podcasts dedicated to answering these questions, which I believe are the core issue for most doubters, non-believers, and skeptics.
Jamie Dimon, the CEO of JP Morgan and notorious crypto hater, posed a question in late 2021 to the Bitcoin community.
"I’ll just challenge the group to one other thing: how do you know it ends at 21 million? You all read the algorithms? You guys all believe that? I don’t know, I’ve always been a skeptic of stuff like that."
In theory, Mr. Dimon’s concerns are valid - we can never be 100% sure there will only be 21 million coins. By the same rationale, we also can never be sure that a president will limit themselves to two terms, that social security benefits will be paid out, or that the sky will remain blue. Anything can happen.
Would Jamie Dimon be convinced if Satoshi himself came down from Bitcoin heaven and gave a webinar on the topic? Probably not. If he was truly worried about the supply of Bitcoin, wouldn't Mr. Dimon extend that same concern to fiat currency that inflates at the whim of central bankers?
Die hard skeptics are always the last to convert.
So let's take this a step further.
Is the concern that Bitcoin faces existential threats or that Bitcoin is the existential threat?
That’s the real question, deeply entrenched in non-believers.
If Bitcoin is the existential threat to the current system, then we can reasonably expect institutions to take the Jamie Dimon path, spreading fear uncertainty and doubt and fighting against the emergence of this new technology.
It is easy for us to see through this as believers. The rest of the world will eventually open their eyes as well.
Bitcoin is here to say. It is not being threatened. It is the threat.
IMPORTANT NOTE: I will be joined by Willy Woo, live on YouTube today at 9:30 AM EST. Subscribe to my channel so you don't miss it!
Bitcoin Thoughts And Analysis
DAILY CHART
Bitcoin made a nice move yesterday, giving a glimpse of hope to bulls on twitter. The reality? Not a big deal. Price is still sideways, and anything below $17,592 is effectively meaningless. That line is the June low and has to be broken before we can even discuss a bull case.
I think we should at least test it as resistance here, but nothing is certain.
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/USDT
Cool. Yesterday I discussed the fact that descending triangles break up over 50% of the time, which is exactly what we saw with Ethereum, allowing aggressive traders to capture roughly a 10% move to the upside.
To be fair, price has still made a lower high for now, so you could theoretically draw a new descending triangle, assuming the candle actually closes today with a lower high. But the triangle that was in place broke, so there's no real need to do so. I drew the second blue line, which is unconfirmed, just to illustrate the idea.
Not surprisingly, price was rejected exactly at $1,284, the key level that I have been discussing for months. That area should remain strong resistance, as price hung out there for most of September and October. Further, the 50 MA and 200 MA still loom above.
It will take some serious conviction for bulls to continue to push much higher.
For now, we will take the small win.
Legacy Markets
"US equity futures edged higher and the dollar slipped for a second day, as investors awaited a speech by Federal Reserve Chair Jerome Powell for signals about the path of interest-rate increases and assessed prospects for China’s economic reopening.
Investors will keep their attention trained later on Powell’s comments on the economy and the labor market. He is widely expected to signal that the next Fed rate hike will step down to 50 basis points, though he will also likely warn that policy tightening has further to run.
Those hopes of slower interest rate rises, alongside mounting optimism over China’s reopening, pushed the dollar lower and put the greenback on track for its worst month since 2010. Benchmark Treasury 10-year yields slipped and are down more than 25 basis points in November.
A degree of caution remains among traders before the Fed chair’s remarks, given still-high global inflation and a robust jobs market.
“The market is hesitating a bit,” Societe Generale strategist Kenneth Broux said. “I would be very surprised if it is a dovish speech.” Some may hold the view that “the dollar has peaked and that the Fed Funds rate will peak at 5%, but I fear Powell will tell them it’s too soon,” he said.
Key events this week:
EIA crude oil inventory report, Wednesday
Fed Chair Jerome Powell speech, Wednesday
Fed releases its Beige Book, Wednesday
US wholesale inventories, GDP, Wednesday
S&P Global PMIs, Thursday
US construction spending, consumer income, initial jobless claims, ISM Manufacturing, Thursday
BOJ’s Haruhiko Kuroda speaks, Thursday
US unemployment, nonfarm payrolls, Friday
ECB’s Christine Lagarde speaks, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.6% as of 10:25 a.m. London time
Futures on the S&P 500 rose 0.2%
Futures on the Nasdaq 100 rose 0.3%
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index rose 0.9%
The MSCI Emerging Markets Index rose 1.6%
Currencies
The Bloomberg Dollar Spot Index fell 0.4%
The euro rose 0.4% to $1.0368
The Japanese yen fell 0.1% to 138.83 per dollar
The offshore yuan rose 0.7% to 7.0887 per dollar
The British pound rose 0.5% to $1.2016
Cryptocurrencies
Bitcoin rose 2.6% to $16,888.93
Ether rose 3.9% to $1,266.7
Bonds
The yield on 10-year Treasuries was little changed at 3.74%
Germany’s 10-year yield advanced four basis points to 1.96%
Britain’s 10-year yield advanced four basis points to 3.14%
Commodities
Brent crude rose 2.3% to $84.90 a barrel
Spot gold rose 0.6% to $1,760.11 an ounce"
Coinbase Wallet Will No Longer Support These Coins
It is sobering to see the blue-chip altcoins of 2017 become so obsolete that not even Coinbase Wallet will support them. Starting December 5th, BCH, ETC, XRP, and XLM and their networks will no longer be supported due to “low usage.” It’s important to note that, “this does not mean your assets will be lost, any unsupported asset that you hold will still be tied to your address(es) and accessible through your Coinbase Wallet recovery phrase.”
If you do plan to withdraw these assets, it’s important that you follow Coinbase’s instructions on “moving unsupported assets,” so the funds aren't lost.
Some investors will write this off as a lesson on forks, centralization, and old tech, but I think there is a simpler, more powerful lesson - most altcoins simply don't make it. If you are convinced that the “blue-chip” coins today are going to thrive in the next bull market, then I hate to burst your bubble - it’s probably not going to happen for most of them.
Bear markets clean out the old to make way for the new. There’s likely only a small handful of coins today that will hold their value in the future.
Bitfront Exchange Announces Shutdown
I have literally never heard of Bitfront. If you are a user, then it is important to note that the exchange is shutting down. According to CoinMarketCap, Bitfront is the 86th largest spot exchange and had between $90m - $100m trading volume in the past 24 hours. The announcement of their closing came on the same day as BlockFi’s chapter 11 filing, but the decision was “unrelated to recent exchanges misconduct.” The reason for the shutdown is, “challenges in the rapidly evolving industry.”
Brazil Is Paving The Way For Adoption
Brazilian lawmakers voted in favor of allowing crypto trading and use throughout the country. Once signed by the President, the bill will serve as a complete regulatory framework for digital assets in the country. Although it's being criticized over a few missed points, the overall global response has been positive. Crypto was not made legal tender, but the new guidelines should make Brazil a powerhouse in South America.
There have been periods where crypto trading in Brazil has been far more popular than trading stocks. This bill reflects the will of the people, and is a huge step forward.
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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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