The Wolf Den #711 - Bitcoin Is Risen! But We Are Still "Tokenizing" Hot Trash.
CryptoGPT? Give Me A Break!
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In This Issue:
Bitcoin Is Risen! But We Are Still "Tokenizing" Hot Trash.
Twitter Spaces With Mike Novogratz And Chris Giancarlo TODAY
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
Lightning Will Strike At Coinbase
The Liquid Staking Wars Are Here
MetaMask Launches Fiat Purchases
Bitcoin Is Risen! But We Are Still "Tokenizing" Hot Trash.
It took a few days for me to be able to use this Easter title, but the wait was certainly worth it as we've now surpassed $28,600 and pushed above $30,000. However, it seems we're only in the initial phase of the bull market, and we're already witnessing literal piles of garbage raising millions of dollars.
It appears we haven't learned our lesson.
Brace yourself - I’m annoyed.
Many of us have always had a love/hate relationship with crypto. On one hand, there's the potential of cryptocurrencies beyond Bitcoin, but reaching that potential requires navigating through a minefield of false claims and dubious projects, such as the newly introduced CryptoGPT.
I had hoped to wake up yesterday to some groundbreaking news that would end the dry spell, but instead, I discovered that a ChatGPT knock-off called CryptoGPT raised $10 million in a Series A funding round, resulting in a $250 million valuation.
Here's a bold statement: the so-called reputable reporters who cover these projects are as culpable as the the people behind them.
You may disagree, but CryptoGPT and similar knock-offs seem like poor imitations. ChatGPT is fantastic, but it doesn't require cryptocurrency to improve. If you need convincing, consider what Coinbase is building with Base, all without a token! The obsession with tokenizing everything is unhealthy and must stop.
Now, let me give you a brief rundown of what CryptoGPT is: take a successful product like ChatGPT, alter the name slightly to deceive unsuspecting investors, include an NFT component for added hype, sprinkle in complex crypto jargon, latch onto the 'to earn' trend, liken yourself to Google, Amazon, and Meta, release a subpar product, and reveal only a few developers' names. Voilà, you have CryptoGPT.
The very fact that they used “GPT” in the name to capitalize on the hype and confuse investors should tell you all you need to know.
Look. I can do it too!
To draw a comparison, CryptoGPT is to ChatGPT what BitcoinSV is to Bitcoin. This statement may ruffle some feathers, but if we want to avoid repeating past mistakes, the truth is crucial.
It this an outright scam? I don’t know, but it has some of the telltale signs…
Now, onto my next point – which may be controversial – media companies covering these projects irresponsibly are just as much to blame.
The first article published failed to mention that CryptoGPT has no affiliation with ChatGPT. While this fact may be obvious to us and the writer, it's not apparent to readers who lack prior knowledge of ChatGPT and the tokenization obsession. I don't expect major news outlets to criticize CryptoGPT as I have, but a little healthy skepticism from a source claiming to care about crypto would be appreciated.
Many articles circulating seemed to hastily publish confusing quotes from the site, and they read more like advertisements for CryptoGPT than actual reports, which is disappointing. It raises questions: did any of the authors test the product or the apps available on the site? Did anyone discuss the questionable tokenomics? When I asked Alex, the CryptoGPT chatbot, for a litepaper (since there's no whitepaper), I received an unsatisfactory response. Unsurprisingly, none of the articles mentioned this issue. I eventually found the litepaper, which you can read HERE, but I wouldn't recommend wasting your time on it.
If we want cryptocurrencies beyond Bitcoin to succeed, this behavior must change. Blindly tokenizing popular trends is unrealistic, and hastily reporting on such projects is equally irresponsible. We should expect better, particularly from crypto outlets claiming to prioritize the industry's well-being.
Not everyone may appreciate this intro, but I needed to voice my concerns because merely targeting scams isn't enough. AI is indeed exciting, but let's not repeat past mistakes where everything revolves around crypto. I would be delighted to be proven wrong and see AI intersect with crypto, which I believe will happen in the future. However, rushing to the finish line and careless reporting aren't the solutions. Let's not spoil a good thing; we did enough of that in 2022.
Twitter Spaces With Mike Novogratz And Chris Giancarlo TODAY!
Tuesdays have quickly become my favorite day of the week, with an epic lineup of spaces guests. Today I am joined by Galaxy CEO Mike Novogratz and Chris Giancarlo, former Chairman of the CFTC. This is going to be epic.
11 AM EST - https://twitter.com/i/spaces/1zqJVProewPKB?s=20
Bitcoin Thoughts And Analysis
Finally.
After almost 15 attempts, Bitcoin has broken key resistance at $28,600, shooting directly past $30,000 as expected. All MAs are currently curled up and rising, with increased volume on the move, albeit less than I would have hoped for so far.
$28,600 is now the key support for me, with $25,212 still below if we get any serious retrace.
The top of the red square shown in the middle, which is a key area of resistance, is around $32,000, which has been my target for this entire move the entire time.
At some point we will get some major dips, but I do think this could push significantly higher.
Step by step.
Altcoin Charts
Hopefully you were able to watch my charting stream last Wednesday and to set some of the same alarms that I had for coin breakouts. Those alarms have been going off left and right… BNB was the fist which is up nearly 10% since I shared it. Here are a few more.
Remember, Bitcoin is still outperforming alts! While these are decent opportunities, it has still been better to sit in Bitcoin if you are trying to stack Bitcoin through trading. That could change soon…
I have shared this chart many times in the past. First, remember that charting Dominance is a bit of a meme, because it is not a traded asset and therefore there are no buy and sell orders to create support and resistance. That said, it can give us general clues as to when alt coins are likely to outperform.
Dominance is currently at 48%, the highest it has been in a year. It is also reaching the range highs where it has consistently retraced and alt coins have performed well. This coincides with overbought RSI and massive bearish divergence, also a past signal that Bitcoin is ready to calm down and alt coins are ready to explode.
This time could absolutely be different… but if it ain’t broke, don’t try to fix it.
I think alts are going to outperform very soon, once Bitcoin is done with the current move.
FTM is breaking out through descending resistance, after holding the 50 MA as support. Breakout traders would already buy. More conservative traders will wait for the daily candle close.
Target is the top of descending resistance around .65.
We want to see more volume come in today.
SOL has been one of the easier longs since the FTX debacle, because it sold off irrationally.
The last trade was the black line after the breakout through $14.96.
Now we have a clear breakout in the works through the blue descending resistance, the blue 50 MA and the red 200 MA.
We ideally want to see a bit more volume and we definitely need to see a candle close above all three of these resistances.
Next target is $27.12, with $39.01 looming above that.
Legacy Markets
European stocks gained, following positive momentum in Asia, as investors prepared for inflation data and corporate results that could provide insights into the financial system's health. The Stoxx Europe 600 rose around 0.5%, led by cyclical industries such as miners and automakers. S&P 500 and Nasdaq 100 contracts were slightly higher after a late Wall Street recovery.
There are concerns about the health of the financial system as cracks appear in 2023's equity advance, and hedge funds and speculators accumulate the deepest short position since November 2011. Inflation data is due on Wednesday, while Friday marks the start of a potentially weak earnings season.
The dollar slightly fell after three days of gains, while Treasury yields declined, and Bitcoin surged above $30,000 for the first time since June. Market expectations of a Fed rate hike remain strong, following robust US payrolls and a drop in unemployment.
Japanese shares climbed due to the dovish stance of the new Bank of Japan governor and Warren Buffett's reported interest in increasing exposure to Japanese stocks. Oil prices recovered, with West Texas Intermediate trading above $80 a barrel, and gold remained near $2,000 an ounce.
Key events this week:
IMF global financial stability report, Tuesday
Chicago Fed’s Austan Goolsbee, Minneapolis Fed’s Neel Kashkari and Philadelphia Fed’s Patrick Harker speak at separate events, Tuesday
Canada rate decision, Wednesday
US FOMC minutes, CPI, Wednesday
Richmond Fed’s Thomas Barkin speaks, Wednesday
China trade, Thursday
US PPI, initial jobless claim, Thursday
US retail sales, business inventories, industrial production, University of Michigan consumer sentiment, Friday
Major US banks JPMorgan Chase, Wells Fargo and Citigroup report earnings, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.5% as of 9:17 a.m. London time
S&P 500 futures rose 0.1%
Nasdaq 100 futures rose 0.2%
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index rose 0.9%
The MSCI Emerging Markets Index rose 0.5%
Currencies
The Bloomberg Dollar Spot Index fell 0.3%
The euro rose 0.4% to $1.0904
The Japanese yen rose 0.3% to 133.15 per dollar
The offshore yuan was little changed at 6.8900 per dollar
The British pound rose 0.5% to $1.2439
Cryptocurrencies
Bitcoin rose 3.4% to $30,121.01
Ether rose 1.9% to $1,921.82
Bonds
The yield on 10-year Treasuries declined three basis points to 3.38%
Germany’s 10-year yield advanced five basis points to 2.24%
Britain’s 10-year yield advanced six basis points to 3.49%
Commodities
Brent crude rose 0.7% to $84.77 a barrel
Spot gold rose 0.6% to $2,002.86 an ounce
Lightning Will Strike At Coinbase
It's uncertain whether a random Twitter user significantly influenced Coinbase's roadmap or merely extracted new information, but sometimes a bit of criticism can be impactful. Over the weekend, a Twitter user accused Brian Armstrong of "actively ignoring the Bitcoin Lightning Network" and claimed he "hasn't ever tweeted about it. Not even once." This comment prompted a swift response. Integrating the Lightning Network would bring Coinbase up to speed with other exchanges, such as Bitfinex, Kraken, and OKX, which have already made the move. This development is undoubtedly a positive step towards winning over the Bitcoin community.
The Liquid Staking Wars Are Here
The linked article above highlights an intriguing point: with the Shanghai fork occurring in just one day, a competition between liquid staking protocols is imminent, and this is a positive development! The article draws parallels to the Curve Wars, which revolved around stablecoin liquidity dominance. This upcoming battle will be dubbed the "Liquid Staking Wars." Demand for liquid staking tokens is already high pre-Shanghai, and it is expected to surge even further post-Shanghai.
“The Liquid Staking Wars will be won by whichever protocol can capture the most TVL and volume for their LST. I believe that the battle for LST supremacy will see its first skirmishes by early May and that it will have a lasting impact on the DeFi ecosystem. This war — or competition between LST protocols to provide the dominant asset in crypto — will reshape all crypto pairs across all DEXs”
MetaMask Launches Fiat Purchases
Cryptocurrency wallet and decentralized application (DApp) provider MetaMask has launched a new feature allowing users to buy crypto with fiat currency directly from its Portfolio Dapp. The "Buy Crypto" feature supports various payment methods, including debit and credit cards, PayPal, bank transfers, and instant ACH. It will be available in over 189 countries, offering more than 90 tokens across eight networks, such as Ethereum, Polygon, and BNB Smart Chain. Users can access the feature by connecting their wallets to the Portfolio Dapp or clicking the "Buy" button in the MetaMask extension wallet. MetaMask has previously partnered with organizations like PayPal and MoonPay to facilitate user onboarding and provide more accessible crypto purchasing options.
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.
Thank you for breaking everything down!