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In This Issue:
Bitcoin Isn’t The Bubble
Bitcoin Thoughts And Analysis
Legacy Markets
Institutions Believe In Silvergate Bank
Inflation Numbers Are All Over The Place
Cathie Wood Is Addicted To COIN
SBF Caught Red Handed
Crypto Is Doomed | How Mario Nawfal & Elon Musk Are Trying To Save it
Bitcoin Isn’t The Bubble
One of my favorite quotes, for which I unfortunately don't know who to credit, is "Bitcoin isn't the bubble, it is the needle." With each passing day, this statement becomes increasingly apparent. A deep dive into the world of Bitcoin reveals the seedy underbelly of our modern financial system. The Federal Reserve is struggling to dig itself out of its hole, and the threat of disinflation and deflation loom large. Fiat currencies are weakening around the world, and regulators are waging war against us. It seems that every day, we add something new to our list of financial woes, and we must always be thinking ahead. As a result, people around the world are beginning to question their money, how to store value, and how to escape the fiat system.
We are lucky to have found an answer.
That answer is becoming increasingly obvious as the prices of everything continue to skyrocket to astronomical heights, exceeding historical records even after discounting year-over-year fluctuations. In 2022, U.S. inflation hit a nearly 40-year high of 9.1%. The last time we saw a rate this high was in 1981, during the worst economic downturn since the Great Depression prior to the 2008 market crash. Keep in mind, the Federal Reserve's "supposed" target is 2% inflation, which means that we are currently tripling that figure. Moreover, this figure is an average, and many of us have noticed that the prices of some items have gone through the roof. According to the data, "the index for shelter was by far the largest contributor to the monthly all items increase, accounting for nearly half of the monthly all items increase, with the indexes for food, gasoline, and natural gas also contributing." Essential items for survival are becoming unaffordable.
The future is uncertain, and Bitcoin (along with a few other strong assets) is probably our best bet. Even in the current shaky market, I believe that it is riskier for investors to sit on the sidelines than to have skin in the game. I have no idea how high or low the price of Bitcoin can go, or when we will see new highs or lows, but I do know that current market conditions make further upward price action almost inevitable over time. Zooming out and looking at the macroeconomic environment, it is difficult to imagine that patient investors will be punished.
I will simply buy and wait.
There is a grand awakening happening. It will continue to progress slowly, but more and more people are realizing that the system is broken and that the bubble will eventually burst.
"Bitcoin isn't the bubble, it is the needle."
Bitcoin Thoughts And Analysis
I continue to see no reason for concern at the moment, and continue to believe the bottom is more likely in than not.
Yesterday had some low time frame volatility on CPI, but price continued up to end the day, still holding support at $21,473. We still have key resistance ahead at $25,212.
Not much else to look at.
As you know, there was bullish divergence with oversold RSI on multiple lower time frames, so this nice move up was highly likely.
Legacy Markets
Wall Street futures fell as investors assessed the impact of inflation data from the US and UK on the outlook for interest rates. Meanwhile, European stocks steadied, with gains in consumer stocks helping to erase a decline in the Stoxx 600. The dollar rose against its peers, while the two-year Treasury yield held near the highest level since November. Federal Reserve officials continued to signal that rate increases could last longer than previously anticipated, while investors are evaluating US CPI data that showed prices rose more than forecast.
Key events:
US retail sales Wednesday
US jobless claims, Australia unemployment, Cleveland Fed President Loretta Mester speaks at Global Interdependence Center event Thursday
France CPI, Russia GDP Friday
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.3% as of 6:09 a.m. New York time
Nasdaq 100 futures fell 0.4%
Futures on the Dow Jones Industrial Average fell 0.2%
The Stoxx Europe 600 rose 0.1%
The MSCI World index fell 0.2%
Currencies
The Bloomberg Dollar Spot Index rose 0.4%
The euro fell 0.2% to $1.0720
The British pound fell 0.8% to $1.2076
The Japanese yen fell 0.1% to 133.34 per dollar
Cryptocurrencies
Bitcoin was little changed at $22,246.49
Ether was little changed at $1,555.19
Bonds
The yield on 10-year Treasuries was little changed at 3.74%
Germany’s 10-year yield declined two basis points to 2.42%
Britain’s 10-year yield declined 10 basis points to 3.42%
Commodities
West Texas Intermediate crude fell 0.9% to $78.33 a barrel
Gold futures fell 1.1% to $1,845.50 an ounce
SPX (S&P 500 INDEX)
I saw this on twitter in passing, so credit to whoever posted the idea first.
This is the the monthly line chart of the S&P, which shows a clear inverse head and shoulders. It is a bit of a mess on the candle chart, but sometimes it is worth reducing the noise and switching over to lines.
This pattern has already technically seen a breakout, which should be further evidence for those who are bullish that the bottom is in.
A retest of the neckline is likely, so that would be the “dip to buy” if you believe in this pattern.
Institutions Believe In Silvergate Bank
Silvergate Bank has experienced a rocky start to 2023, but institutions see things differently. Let's recap recent news for Silvergate Bank: The Department of Justice initiated a fraud probe into the bank for its relationship with FTX, a $1 billion net loss was reported for Q4, withdrawals spiked after FTX, and a board member left to work at Polygon. As of February 9th, Silvergate became the second-most-shorted stock in the U.S., with over 72.5% of its shares shorted.
However, reports are flowing in of institutions buying up the stock to accumulate massive stakes, so don't count Silvergate out. Susquehanna Advisors Group took a 7.5% stake in Silvergate, worth $35 million. Ken Griffin's Citadel Securities bought a 5.5% stake yesterday, and BlackRock increased its stake from 5.9% to 7.2% on January 31st. State Street Bank holds the largest position at 9.3%.
This is a prime example of institutions quietly gaining crypto exposure while nobody notices or expects it.
Inflation Numbers Are All Over The Place
The release of January's CPI at 6.4% marks the 7th consecutive decline in YoY inflation, yet analysts still can't agree on the underlying trends. Most estimates predicted that January's inflation rate would fall between 6% and 6.3% since December's YoY figure was 6.5%, but the market had other plans. On a month-by-month basis, prices increased by 0.5% for January, and the core CPI inflation rate measured in at 5.6%, rising by 0.4%. While December's CPI data supported the notion that counter-inflation measures were starting to work, January appears to be a setback, making it harder to hold onto that hope.
So, what's your take on this - are you bullish, bearish, or neutral?
Cathie Wood Is Addicted To COIN
When it comes to Cathie Wood's investment strategy, there's no room for caution or fear. This time, ARK Invest purchased 118,695 shares of COIN for a total of $6.7 million, just three days after buying 162,325 shares for $9.2 million. Across three different ARK ETFs, Wood now owns a total of 614,657 shares in COIN worth $28.8 million. However, it's worth noting that to accumulate COIN, Wood has offloaded a significant amount of GBTC. Blindly following an investor is never a wise idea, but it's not unreasonable to consider her moves thoughtfully for believers of the ARK philosophy.
SBF Caught Red Handed
What a turn of events. Just last year, SBF was riding high with an FTX Superbowl commercial, but now he's sneakily accessing content via VPN while under house arrest. Federal prosecutors discovered that Sam was using a VPN and informed the judge, but according to his lawyers, Sam was only watching the AFC and NFC Championships and the Superbowl. While Sam is certainly intelligent enough to use this as a cover story, it's unclear whether he's genuinely interested in American football.
Crypto Is Doomed | How Mario Nawfal & Elon Musk Are Trying To Save it
Mario Nawfal became a sensation in crypto after doing Twitter Spaces with Sam Bankman-Fried in the midst of the FTX collapse. Elon Musk attended his spaces, adding to his popularity and bringing thousands of new followers. Now Mario is competing with the biggest mainstream media companies and trying to bring truth to the crypto space. Will he succeed?
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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