The Wolf Den #643 - Solana's Defining Moment
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:
Solana's Defining Moment
Bitcoin Thoughts And Analysis
Legacy Markets
Argo Blockchain Is In Trouble
Metaverse Trademarks Are Piling In
Avraham Eisenberg Arrested
Great Charting Stream With Gareth Soloway
Forget Web 3. A Vision Of A Web 5 Social Network | Justin Rezvani, Zion
My Recommended Platforms And Tools
Solana's Defining Moment
The future of Solana is in question.
The health of the project is currently the largest elephant in the crypto room. Rational investors are stuck between polar beliefs. Solana holders swear that this is “the buy of a lifetime.” Solana doubters believe it will go to zero and will stop at nothing to see Solana burn.
Who's right?
Let me shake my magic 8 ball.
It says, "I have no idea."
All I can do is dig into the history.
Solana, a cryptocurrency that was founded in March 2020, has experienced a volatile journey over the past two years. Initially, the coin garnered significant attention and support from venture capital firms, including Multicoin Capital, Andreessen Horowitz, and Alameda. This early funding provided Solana with the liquidity it needed to quickly rise through the ranks and become a top 5 coin by market capitalization, trading at a high of $260 in November 2021. The coin was touted as an "Ethereum killer" by many.
SBF was one of Solana's biggest cheerleaders. He created a decentralized exchange on top of the blockchain called Serum. His involvement excited many, but also polarized the community, even when Solana was flying.
Solana's rapid ascent also brought scrutiny and challenges. The coin faced criticism for its reliance on venture capital backing and concerns about the sustainability of its growth. Additionally, Solana faced negative developments, including the departure of major NFT projects and network outages, which damaged its reputation and undermined investor confidence.
One of the most damaging events for Solana was the discovery of fraudulent developer activity, known as the "Master of Anons," who was responsible for a significant portion of the coin's total value locked (TVL). This revelation called into question the stability and integrity of the Solana network and further damaged investor confidence.
The hits have kept coming.
Solana is caught in some nasty headwinds, while token unlocks happen, and forced bankruptcy selling looms on the horizon.
And that's not everything.
Yesterday I covered two major NFT projects leaving Solana. Now NFT marketplace Magic Eden and DeFi wallet Phantom are going multi-chain.
As a result of these challenges, Solana has experienced a steep decline in market value, losing 95.7% of its value. This drop puts Solana in a precarious position, as it must now recover from a significant loss in order to regain its footing in the cryptocurrency market. It is unclear at this time whether Solana will be able to mount a successful comeback or whether it will continue to struggle in the face of ongoing challenges.
It may sound like I am ripping on Solana, but that is not the case. Everything has dumped in this bear market. Bitcoin and Ethereum have lost their fair share of value, dropping 75.8% and 74.9% respectively. But 95% is a league of its own for a major project. To put this in perspective, Solana needs roughly a 5x increase to be down 75% instead of 95%. That is a big mountain to climb just to catch up to Ethereum and Bitcoin, even in crypto.
Is this the end of Solana? Maybe. Both Bitcoin and Ethereum have had their “watershed” moments in the past, but neither have dropped more than 95%.
Solana is navigating unprecedented territory.
It is truly difficult to predict the future trajectory of Solana. While it is possible that the coin could experience a resurgence, the high level of volatility and uncertain future prospects make it a risky investment.
We have seen epic comebacks but also seen epic downfalls.
Solana has set itself up to be one or the other.
Bitcoin Thoughts And Analysis
DAILY CHART
The daily MA remains a key resistance for now. Price remains sideways. Sorry, there's just little to report!
Legacy Markets
Key events this week:
US initial jobless claims, Thursday
ECB publishes economic bulletin, Thursday
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.1% as of 5:53 a.m. New York time
Nasdaq 100 futures were little changed
Futures on the Dow Jones Industrial Average rose 0.2%
The Stoxx Europe 600 rose 0.3%
The MSCI World index was little changed
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0635
The British pound rose 0.2% to $1.2054
The Japanese yen fell 0.3% to 133.85 per dollar
Cryptocurrencies
Bitcoin fell 0.3% to $16,649.83
Ether fell 1.3% to $1,195.48
Bonds
The yield on 10-year Treasuries declined two basis points to 3.83%
Germany’s 10-year yield declined five basis points to 2.48%
Britain’s 10-year yield advanced seven basis points to 3.71%
Commodities
West Texas Intermediate crude fell 0.6% to $79.05 a barrel
Gold futures fell 0.7% to $1,810.30 an ounce
Argo Blockchain Is In Trouble
The legacy Bitcoin mining industry is facing increasing pressure, as exemplified by the recent developments at Argo Blockchain. Founded in 2017, Argo has requested a temporary suspension of trading on the NASDAQ in preparation for an announcement on Wednesday. This follows the company's accidental release of draft material earlier this month, in which it revealed plans to file for Chapter 11 bankruptcy.
Argo is currently in "advanced negotiations" with a third party to sell some of its assets, but there is no guarantee that this will be successful. If the company is unable to secure an emergency loan or find a buyer, it may be forced to file for bankruptcy. This outcome would be detrimental for Argo, and highlights the challenges facing legacy Bitcoin miners as they navigate a rapidly changing and competitive market.
Metaverse Trademarks Are Piling In
Despite the current lack of mainstream interest in the Web3 space, financial institutions are taking notice of the potential for cryptocurrency activity in the metaverse. Recently, both Fidelity and HSBC have filed trademarks related to crypto activity in virtual worlds. Fidelity's patent pending application covers a range of metaverse services, including trading, money management, and mutual fund investing. HSBC's trademark application relates to the association of the bank's name with typical crypto activity in virtual environments.
It is worth noting that these applications do not specify whether the companies plan to build their own metaverse or join an existing one. While it is unlikely that we will see these firms fully embrace the metaverse in the near future, their interest in the potential of virtual world crypto activity is noteworthy. As the Web3 space continues to evolve and mature, it will be interesting to see how these financial institutions approach the potential for crypto activity in the metaverse.
Avraham Eisenberg Arrested
That did not take long.
A few months ago, Mango Markets was exploited for $110M. The perpetrator, Avraham Eisenberg, publicly acknowledged that he was behind the incident and claimed that it was a “highly profitable trading strategy” that was deployed by his team. He said these were “legal open market actions.”
I guess he was wrong.
The FBI is not playing around.
Great Charting Stream With Gareth Soloway
The original purpose of this newsletter was to help people on their investing journey, which included learning how to trade. While I have largely stopped sharing charts en masse, it is still fun to go back and forth with another seasoned technical analyst to talk about the market.
If you missed my stream with Gareth Soloway yesterday and are interested in trading and charting, it is worth revisiting.
Forget Web 3. A Vision Of A Web 5 Social Network | Justin Rezvani, Zion
Justin Rezvani, listed in Forbes 30 under 30, is revolutionizing social media. If you don’t want to miss this revolution, follow Justin and check out this interview, where we discuss: Zion, Web3 vs Web5, new identity standards that Justin has invented, the size of Tony Robbins's hands. and the problem of building decentralized apps on centralized infrastructure.
In this episode with Justin, we discussed:
Lightning whitepaper
Web 2 + Web 3 = Web 5
What is Zion
New identity standard
Solving UX/UI problem of crypto
How big is Tony Robbins’ hand
The book: Unapologetic freedom
What’s wrong with the social media
Decentralizing Zion
Problem with the centralized infrastructure
Do we live in a simulation?
Bitcoin
Thanks to BITGET for sponsoring.
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