The Wolf Den #642 - Predictions From The Past
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In This Issue:
Predictions From The Past
Bitcoin Thoughts And Analysis
Legacy Markets
HODLers Are On The Rise
Solana NFTs Plan To Leave
Hashrate Takes The Polar Plunge
My Recommended Platforms And Tools
Predictions From The Past
As the year comes to a close with just over 100 hours remaining, it is an opportune time for reflection. While it may be an understatement to describe this year as a "train wreck," it is important to look forward and consider ways to improve in the future. To do so, I have decided to review my thoughts and predictions from exactly one year ago. By evaluating and critiquing my past ideas, I hope to gain a better understanding of how to create new and improved ones for the coming year. On this day one year ago, I made a list of things I was most excited for in 2022.
Let’s see how I did.
On December 27th, 2021, I wrote the following:
I have gone ahead and brainstormed a list of topics that I’m most excited for this coming year. A 2022 wishlist, if you will. I expect many of these items to develop naturally. Others we will have to fight tooth and nail for. Nonetheless, I can’t wait to see them unfold in one way or another.
Governments Buying Bitcoin | Companies Buying Bitcoin | Crypto Companies Going Public | Positive Regulation And Clarity | Mergers And Acquisitions | Picks And Shovels Investing | The Flippening? | Ethereum 2.0 | A Surge In DeFi TVL | The Next Cycle | NFT Collaborations | Stablecoins And Banking Integration | Rollup and Snarks | And Of Course, New All-Time Highs
Overall, it seems that my predictions from last year were somewhat pedestrian, earning a 4/10 rating. While we did see the development of Ethereum 2.0, improvements in rollups and snarks, and stablecoins gain some acceptance, many of my predictions did not come to fruition.
It is worth noting that exactly one year ago, Bitcoin reached a high of $52,000, and there was a significant level of optimism in the market. However, as of now, Bitcoin is trading at $16,800, a 67.7% drop from that price, and sentiment is generally pessimistic.
The lesson? It is important to remember the value of considering sentiment and being cautious of price movements. With this in mind, it is worth examining my predictions for the current year to see if they are more likely to come to fruition.
Governments Work Towards Clarity | Legacy Financial Institutions Increase Involvement | Contagion Continues | Hashrate Rises | Weak Miners Capitulate | Investors Realize Most Altcoins Won’t Reach ATHs | We Establish A Bottom | Dollar-Cost Averagers Outperform | The Flippening Approaches | DeFi TVL Slowly Recovers | Most NFTs Trend To 0 | CBDC Adoption Surges | And Of Course, The Next Bull Run Begins
In making these predictions, I aimed to be cautious rather than overly optimistic. While it is always possible to be pleasantly surprised by market developments, it is important to keep our expectations in check. With that said, I do anticipate that we will see a market bottom establish itself in the coming year and that dollar-cost averaging will outperform.
Overall, I believe that next year will be a time for sorting out the strong performers from those that are struggling. While there may still be some turbulence in the market, the strong players are likely to emerge as the winners.
While I may have been overly optimistic at the end of 2021, I am now feeling reasonably optimistic about the year ahead. Here's to a successful and productive year for all!
Bitcoin Thoughts And Analysis
DAILY CHART
The Bollinger Bands are extremely tight... again. It is rare that we see them this close to one another, which means that volatility will soon return. This is no surprise for now, considering how tight the range that Bitcoin has been trading in has become.
As you can see, price is trading in the bottom half of the bands, finding resistance at the centerline. This is in confluence with the 50 MA below.
There is nothing to do for now, but the next major move should be explosive.
Legacy Markets
"Equities climbed Tuesday while the dollar declined amid positive sentiment from China’s rollback of Covid isolation measures and the cooling of a key inflation gauge in the US.
“China has clearly indicated that the country is willing to take the big leap forward in terms of reopening, which the global economy desperately needs,” said Kunal Sawhney, chief executive officer of Kalkine Group. Still, “it may be a little far-fetched to hope for too much from equities in the near to medium term, maybe until mid 2023.”
Key events this week:
US wholesale inventories, Tuesday
BOJ summary of opinions of Dec. 19-20 meeting, Wednesday
US initial jobless claims, Thursday
ECB publishes economic bulletin, Thursday
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.7% as of 5:43 a.m. New York time
Nasdaq 100 futures rose 0.7%
Euro Stoxx 600 index rose 0.5%
Japan’s Topix index rose 0.4%
South Korea’s Kospi index rose 0.7%
The Shanghai Composite rose 1%
Currencies
The Bloomberg Dollar Spot Index fell 0.3%
The euro rose 0.2% to $1.0663
The Japanese yen was fell 0.3% to 133.30 per dollar
The offshore yuan rose 0.2% to 6.9620 per dollar
The British pound was unchanged at $1.2062
Cryptocurrencies
Bitcoin rose 0.1% to $16,854.64
Ether rose 0.4% to $1,221.45
Bonds
The yield on 10-year Treasuries declined one basis point to 3.74%
Germany’s 10-year yield advanced 10 basis points to 2.5%
Japan’s 10-year yield advanced one basis point to 0.455%
Commodities
West Texas Intermediate crude rose 1% to $80.38 a barrel
Spot gold rose 0.6% to $1,808.46 an ounce"
HODLers Are On The Rise
Bitcoin "accumulation addresses" in a firm bull trend contrast with BTC whale selling.
According to data from Glassnode, "accumulation addresses" that hold Bitcoin are quickly approaching their all-time high for total Bitcoin held. These accumulation addresses, which Glassnode defines as addresses that have at least two incoming non-dust transfers and have never spent funds, currently hold approximately 3.1 million Bitcoin, nearing the all-time high of 3.4 million set in August 2015. There are currently 793,000 such addresses.
While HODLers, or individuals who choose to hold onto their cryptocurrencies rather than sell them, have faced challenges in recent years, it appears that they are continuing to accumulate and hold onto their Bitcoin. This trend raises the question of where the selling is coming from. One possibility is that larger players are selling their stacks to smaller, retail investors.
Overall, this distribution of Bitcoin ownership is positive, as it helps to mitigate the skewing of global assets towards the top 1% and top 10%. While this trend may reverse as the bull market returns, it is currently a net positive. It is important to remember that we are weathering this difficult period and will eventually emerge from it.
Solana NFTs Plan To Leave
The projects are likely to release official roadmaps in January 2023.
The news that DeGods and y00ts, two high-profile NFT projects on Solana, have announced their plans to move to other chains has caused a stir in the community. DeGods plans to migrate to Ethereum, while y00ts will move to Polygon. This migration is expected to take place in the first quarter of 2023, and it will be interesting to observe both the success of the migration and the potential impact on Solana in the future.
While the departure of two NFT projects may not seem significant, a trend of multiple projects leaving could be detrimental to Solana. It will be important to monitor the situation and see how it develops in the coming months.
Hashrate Takes The Polar Plunge
The freezing temperatures that have swept across the United States in recent weeks have had a notable impact on the Bitcoin hashrate, causing it to drop to levels not seen since September. While the blizzard has caused significant disruption and hardship for those in its path, it is a testament to the strength of the Bitcoin network that it has been able to continue operating despite these challenges.
In fact, some miners in Texas have even chosen to shut down their operations voluntarily in order to redirect additional power back to the grid. This demonstrates the power of decentralization as a means of survival, as the network is able to continue functioning even when traditional systems such as banks and infrastructure are disrupted. It is a reminder of the resilience and adaptability of decentralized systems like Bitcoin.
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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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