The Wolf Den #688 - Let Your Conviction Run Deep
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In This Issue:
Let Your Conviction Run Deep
Bitcoin Thoughts And Analysis
Legacy Markets
Litecoin Now Has Ordinals
Visa Denies Rumors Of Crypto Exit
Vitalik Speaks Tomorrow
Let Your Conviction Run Deep
How deep is your conviction in crypto?
Seriously, take a moment and consider the core of your investment beliefs. This may not be an easy task, but it is a necessary challenge that should result in a clear answer.
For many investors, this ise a particularly challenging exercise. Conviction is defined as a deep opinion or belief, and we all hold convictions in our everyday life. Rarely do we need to defend and rely on them actively and consistently.
Crypto demands this 24/7.
One of the most common pitfalls I have noticed in new traders and investors, especially in the crypto space, is weakness in the roots of their convictions. It is common to find people who believe in the long-term success of crypto, but for the wrong reasons. Weak conviction is relying on what one "expert" said, believing prices can only go up, and being certain of what you think.
A newcomer, under the false impression of strong conviction, maintains their beliefs on shakier grounds. Typically their sense of hope and conviction is solely built on price. This is a dangerous situation when money and emotions are on the line and is the reason that there are panic sellers on any significant drop.
Is this you? When you deeply consider your reason for being here, is it simply to make a profit?
When asked about their convictions, seasoned investors may point to the long history of fiat's failures, the advancements in blockchain technology, the similarities between Bitcoin and gold, the parallels between Ethereum and the internet, or the historical price channels that Bitcoin has followed. It's easy to recognize when someone knows what they are talking about because they exude confidence, but they also understand the importance of avoiding certainty in investing, as it often leads to failure.
In summary, newcomers to the crypto space often maintain their beliefs on shakier grounds, with their sense of hope and conviction solely built on price. In contrast, seasoned investors rely on a wide range of factors such as history, philosophy, economics, psychology, technical analysis, and sentiment to establish their beliefs, which are firmly grounded and difficult to shake.
Regardless of your investing style or level of participation, it's crucial to find a reason deeper than price to stay invested, regardless of the size of your investment.
As we move further into 2023 and approach events such as the Bitcoin halving and Ethereum's consistent deflation, it's essential to resist the temptation to join the panic-selling or FOMO-buying crowds. Instead, focus on finding your "why" and remain committed to your convictions. This mindset will place you ahead of the majority.
Let your conviction run deep.
Bitcoin Thoughts And Analysis
Bitcoin continues to trade in a small range, chopping between $23,000 and $24,000, and really between $21,000 and $25,000. There’s very little to analyze here. We continue to wait.
Legacy Markets
US Futures Fall as Data Backs Higher Rate Messages: Markets Wrap
US futures are expected to continue to decline, as the 10-year Treasury bond yield has reached 4% for the first time since November, indicating that the Federal Reserve's warnings of higher interest rates are being taken seriously. The Nasdaq has retreated 0.5%, and Europe's Stoxx 600 equity is wobbling. Markets are focusing on how high interest rates will go in the US and eurozone, with some expecting the Fed policy rate to reach 5.5% or even 6%. Euro-area inflation has slowed, but underlying price pressures have surged to a new record, putting pressure on the European Central Bank to increase rates further. Some fear China's economic recovery will exacerbate global inflation. The US dollar is expected to gain further, while oil prices are volatile due to concerns over tighter US monetary policy and the potential revival of Chinese demand.
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.4% as of 6:23 a.m. New York time
Nasdaq 100 futures fell 0.5%
Futures on the Dow Jones Industrial Average rose 0.2%
The Stoxx Europe 600 was little changed
The MSCI World index fell 0.2%
Currencies
The Bloomberg Dollar Spot Index rose 0.3%
The euro fell 0.4% to $1.0623
The British pound fell 0.4% to $1.1976
The Japanese yen fell 0.4% to 136.75 per dollar
Cryptocurrencies
Bitcoin fell 0.8% to $23,371.21
Ether fell 1% to $1,641.62
Bonds
The yield on 10-year Treasuries advanced three basis points to 4.02%
Germany’s 10-year yield was little changed at 2.72%
Britain’s 10-year yield was little changed at 3.84%
Commodities
West Texas Intermediate crude rose 0.7% to $78.26 a barrel
Gold futures fell 0.4% to $1,838.30 an ounce
Litecoin Now Has Ordinals
Ordinals are currently in the midst of a hype cycle, having recently migrated from the Bitcoin Ordinal Github to Litecoin and rapidly approaching 100,000 inscribed NFTs. While the idea of using Litecoin for NFTs is clever given its similarities to Bitcoin, it's unclear if there's a viable long-term strategy for this approach. Simply moving to a new chain for the sake of novelty could indicate that the hype around Ordinals is fading.
This is similar to the logic behind knockoff NFTs - while they may generate buzz initially, they ultimately lack the staying power to sustain meaningful interest. NFTs on Ethereum and Bitcoin have a clear purpose and established ecosystems, but it's not clear if there's a compelling reason to use other chains for NFTs.
If Ordinals are dependent on a new chain to maintain interest and relevance, their lifespan is likely to be limited. While there may be short-term excitement around new platforms or chains, the long-term value of NFTs will depend on their ability to offer real-world benefits and solve meaningful problems.
Visa Denies Rumors Of Crypto Exit
It's important to remember that not everything you read on the internet is true. Recently, Reuters published an article claiming that Visa and Mastercard were pausing their efforts in the crypto space due to industry meltdowns. While the article cited anonymous sources who were "familiar with the matter" and a spokesperson, there was no one named in the piece.
Since then, however, the accuracy of the story has come into question. Cuy Sheffield, Visa's Head of Crypto, took to Twitter to state that "this story is inaccurate as it pertains to Visa." It's possible that the story only pertains to Mastercard or that it was entirely fabricated. It's also possible that Cuy isn't telling the truth, but that seems unlikely.
Visa has been friendly towards cryptocurrencies for some time now, and it seems unlikely that they would suddenly reverse course at this point. While it's important to stay informed about news in the crypto space, it's equally important to approach new information with a critical eye and recognize that not all reports are equally reliable.
Vitalik Speaks Tomorrow
Ethereum's highly-anticipated annual meetup is currently underway, and many attendees are eagerly anticipating Vitalik's scheduled talk tomorrow evening. While there is some speculation about whether Vitalik will rap and dance again this year, the talk is titled "Ethereum: Next Steps & Future (ethereally)," and it's expected to reveal new details about Shanghai's progress and what's coming next for the platform.
While I don't believe the conference alone will cause a significant pump in the price of Ethereum, any major announcements could result in a positive reaction from the market. Currently, the withdrawal hardfork is the most important narrative surrounding Ethereum, and many investors are waiting anxiously to see how the market will respond. The completion of withdrawals will mark the second largest milestone for Ethereum, behind only the Merge.
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.