The Wolf Den #637 - 5 Years Ago Today
Welcome to The Wolf Den! This is where I share my ideas about the market, technical analysis, education and advice regarding trader psychology and emotional control. The newsletter is released every weekday and is completely FREE.
Trade all spot pairs on Bitget for ZERO fees! You read that right, zero fees...
Bitget is the best crypto exchange for both spot and leverage, world’s largest crypto copy trading platform, the official partner of Juventus Football Club and a top 5 exchange by volume as listed on CoinMarketCap!
Sign up using my link to Bitget and you will get:
• Up to an $8000 sign up bonus
• 15% discount on ALL futures trading fees
• 0 fees on ALL spot market pairs
In This Issue:
5 years Ago Today
Bitcoin Thoughts And Analysis
Legacy Markets
Regulators Are "Completely Complicit" In The FTX Fraud
The SEC Got It Right
Inflation Is Slowly, Slowing
CZ Welcomes The Binance Stress Test
How Secret Network Helped Quentin Tarantino Sell Pulp Fiction NFTs | Guy Zyskind
My Recommended Platforms And Tools
5 Years Ago Today
5 years ago today, crypto investors were euphoric. Bitcoin was ascending roughly $1,000 a day for multiple days in a row, fueling up the tank for altcoins to explode the following month. On December 14, 2017, Bitcoin reached a daily high of $17,085. This was crushed the following day by a high of $18,154.10. Then it hit $19,716.70 the next day, followed by the grande finale - $20,089.00 on the 17th.
As Bitcoin topped out, altcoins went on an absolute tear. The fomo was palpable. On December 14, 2017, Ethereum climbed to $753.12. On January 14, it hit a then all time high of $1,400. Investors were certain that "world-changing" alts such as Ethereum, Bitcoin Cash, XRP, Litecoin, and Cardano were going to go up forever.
Spoiler alert: they were only right about Ethereum.
After half of a decade, prices are seemingly back to square one. Or worse.
What a long, strange trip it's been.
Five years ago, if anyone had been asked where the crypto market would be today, they likely would not have predicted its current state. Nearly every fan of the asset class would have given you an astronomical price prediction for 2022. Similarly, if anyone were asked today where the crypto market will be in five years, we should expect to be equally surprised in 2027 when looking back at 2022.
So was it all for nothing?
If your only goal for the past five years was to hold and be profitable over that specific time frame, then the answer is resoundingly "yes." However, this sentence is ridiculous because it is unlikely that anyone had the specific goal of profiting over that specific five-year time horizon. Of course, many people would have liked to have profited, but the narrative could have been different if any other set of dates were chosen. Further, they could have taken profit at many multiples and at many times over the past five years.
If I had chosen to talk about the middle of 2017 versus the middle of 2022, it would have been a completely different story than if I had chosen to compare the first half of 2018 with the first half of 2023. Arbitrarily picking time frames and making comments about them only serves a self-serving purpose and is a nonsensical exercise.
So, why bother writing this intro at all?
Because hopefully, if you are reading this, you have a reason for doing so beyond making money over an arbitrarily chosen time frame. You are here because you believe that this technology has the potential to fundamentally change the world, regardless of unpredictable market cycles. Alternatively, you may be drawn to the idea of a decentralized future that allows for the bypassing of traditional fiat currencies. The reasons for being interested in crypto are numerous, but the main point is that there are many valid reasons to be interested in it beyond short-term profits.
When you stop focusing solely on the price of crypto, the broader view becomes much clearer. We are doing well, and if you don't feel that way, come back in five years and compare the progress of the technology to the state of the world. I doubt you will be disappointed. Investing is always difficult, but don't let the price of crypto bring you down. It doesn't make sense to do so.
Bitcoin Thoughts And Analysis
WEEKLY CHART
Bullish divergence still looking nice with oversold RSI - something that has only happened 3 times in Bitcoin's history.
RSI is also pushing resistance - this won't confirm until Sunday, so we can't call it now.
A breakout of a pattern on RSI usually leads to same on price.
DAILY CHART
Bitcoin temporarily became a correlated asset once again, jumping on better than expected inflation data. This news was enough to push the asset above the key resistance at $17,592. That's good. I would look for a retest of that area as support.
Today we have an FOMC rate decision, which will likely add volatility to all markets.
As you can see, price is now finding predictable resistance at the 50 MA (blue line). A break above that puts the red 200 MA in play as a target, just over $20,600.
Still a long way to go, but we have taken the first step.
We REALLY want to see $17,592 hold.
Legacy Markets
"US equity-index futures fluctuated between gains and losses as investors debated whether inflation had eased enough to encourage the Federal Reserve to slow monetary tightening.
While a softer-than-expected figure for US consumer price index stoked a rally across stocks and bonds, the gains were tempered by caution that the Fed may still remain resolute on continuing rate hikes. After a 50 basis-point increase in Fed’s policy rate later Wednesday was firmly priced in, traders remained on the edge over what signals policymakers may offer on when the hikes will stop and whether a rate cut is possible next year.
“The question is, with inflation still at generational highs, will the Fed walk through that door?” Stephen Innes, managing partner at SPI Asset Management, wrote in a note. “After an initially high-spirited response, the relatively muted reaction for stocks is likely attributable to pre-risk event positioning, prevailing bearish growth sentiment, technical factors and the devil in the details.”
Key events this week:
FOMC rate decision and Fed Chair news conference, Wednesday
China medium-term lending, property investment, retail sales, industrial production, surveyed jobless, Thursday
ECB rate decision and ECB President Lagarde briefing, Thursday
Rate decisions for UK BOE, Mexico, Norway, Philippines, Switzerland, Taiwan, Thursday
US cross-border investment, business inventories, empire manufacturing, retail sales, initial jobless claims, industrial production, Thursday
Eurozone S&P Global PMI, CPI, Friday
Some of the main moves in markets:
Stocks
Futures on the S&P 500 were little changed as of 5:39 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 0.6%
The MSCI World index rose 0.1%
Currencies
The Bloomberg Dollar Spot Index fell 0.3%
The euro rose 0.3% to $1.0661
The British pound rose 0.2% to $1.2395
The Japanese yen rose 0.6% to 134.73 per dollar
Cryptocurrencies
Bitcoin rose 0.4% to $17,824.45
Ether rose 0.2% to $1,322.72
Bonds
The yield on 10-year Treasuries declined one basis point to 3.49%
Germany’s 10-year yield advanced four basis points to 1.97%
Britain’s 10-year yield advanced one basis point to 3.31%
Commodities
West Texas Intermediate crude rose 1% to $76.14 a barrel
Gold futures fell 0.3% to $1,820 an ounce"
DXY (DOLLAR INDEX)
I drew a circle and got lucky - price dropped right into it.
The dollar had a massive retrace from ~115 to ~103, as predicted. Now as everyone gets euphoric, it is important to remember that the dollar is sitting on a key support. The hope is that it will break down, but statistically it is more likely to bounce here. Proceed with caution with all other assets.
Regulators Are "Completely Complicit" In The FTX Fraud
Yesterday, I was invited to join Yahoo Finance to discuss the state of the crypto market. What I did not know was that Congressman Brad Sherman, crypto skeptic and hater, would be on the show before me.
His words pissed me off. I reacted. Here is what he had to say, for reference.
The SEC Got It Right
We can complain about the SEC all day long, but their handling of SBF has been praiseworthy. After reviewing the SEC's complaint against SBF, it is clear that the SEC's view of SBF aligns with our own. In short, the complaint alleges that SBF "defrauded equity investors, defrauded platform customers, and defrauded Alameda lenders through lies, schemes, misleading statements, and diversion."
One thing I appreciate about the complaint is that it states that Sam was the "ultimate decision-maker" at FTX from its inception until his resignation. The SEC is not buying into the lies that have been promoted by mainstream media, and it is clear that they view Sam as the individual ultimately responsible for the misconduct at FTX. The complaint concludes with a demand for a trial by jury, which will likely take some time, but hopefully, justice will be served.
To read the complaint, click HERE.
Inflation Is Slowly, Slowing
Equity markets reacted positively to the release of November inflation numbers, which beat expectations. The consumer price index rose by .1% from the previous month, while core CPI increased by .2%. The expected values for these figures were a .3% increase for both. However, the fact remains that inflation is high. The consumer price index is 7.1% more expensive than it was a year ago, which is not something to celebrate.
CZ Welcomes The Binance Stress Test
This segment speaks for itself. Figured I would keep you up to date with the drama as it unfolds. Next.
How Secret Network Helped Quentin Tarantino Sell Pulp Fiction NFTs | Guy Zyskind
I sat down with Guy Zyskind, the founder of Secret Network (SCRT Labs) to discuss all things privacy and how Guy’s Secret Network is helping to bring privacy back to the people. Guy has been in the crypto space for almost ten years and believes that mass adoption will happen within the next 10-20 years. He is working with the likes of Quentin Tarantino and Kevin Smith to help speed up the process. How? Check it out in this latest episode of The Wolf Of All Streets podcast.
In this episode with Guy, we discussed:
Why privacy?
What is Secret Network?
Working with Quentin Tarantino
Application of privacy
The tech behind Secret Network
How to make people care about privacy
Interoperability
No one can stop crypto
Thanks to BITGET for sponsoring this video.
My Recommended Platforms And Tools
Proud sponsor of The Wolf Den Newsletter. The world's biggest crypto copy trading platform, up to a $3000 bonus for signing up.
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.
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