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In This Issue:
Bitcoin Will Be Hated
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
Bitcoin Pitched To Mexico’s Congress
All Eyes Are On First Republic Bank
Bitcoin Will Be Hated
Everyone is likely familiar with the well-known "Wall Street Cheat Sheet" infographic, which represents the psychology of a market cycle through a chart. This chart serves as a valuable introduction to both the emotions experienced by market participants and the various phases of a market cycle.
As I contemplated this chart and its connection to Bitcoin, I began to feel that something was missing. The word 'hate' came to mind, but it's not present on the chart. It's no secret that Bitcoin can bring out both the best and worst in people, and in all seriousness, I believe that Bitcoin's next move might be one of the most despised yet. Allow me to elaborate.
The concept originated in 2022 when Bitcoin reached its all-time high in late 2021, followed by a steady decline. June marked the collapse of LUNA, which then triggered a domino effect involving 3AC, Celsius, Voyager, Vauld, FTX, Alameda, Genesis, and Gemini Earn. Many veteran crypto enthusiasts and newcomers alike may never return due to the betrayal they experienced from platforms and individuals they trusted. It's difficult to fault them for their emotional response.
However, 2023 could be when the animosity intensifies. Bitcoin started the year with a sharp rebound from its low, while traditional banks have faltered. First, it was Silvergate Capital, which will be used as a scapegoat to blame the crypto community, followed by Silicon Valley Bank, Signature Bank, Credit Suisse, and potentially First Republic Bank. Although the real culprit is the Federal Reserve's mismanagement of monetary policy, many people had hoped that Bitcoin would perish alongside their favored banks. Unfortunately for them, this has not happened.
If the banking crisis worsens, the media will likely attempt to pin the blame on the crypto community. While their arguments may seem persuasive, don't give in to their deception. Regulators are already displeased with having to mediate between failing banks as Bitcoin thrives on the traditional system's demise. The actual problem lies in broken bonds, aggressive interest rates, rising inflation, and policy blunders caused by central banks. As Bitcoin continues to succeed, its detractors will search for a scapegoat, so keep that in mind.
For the record, I do not wish for the U.S. banking system to collapse. Innocent people and businesses are already suffering, and Bitcoin's rise doesn't justify this. We all pay a price whenever a bank fails, in one way or another. Ideally, capital would gradually shift from the fiat system to the crypto realm, but this is unlikely. Has there ever been an instance in history where people have exited a burning building in a calm and orderly manner? If the situation worsens, the rush to Bitcoin could be overwhelming, and the resentment towards it will only fan the flames, making Bitcoin unstoppable.
Bear in mind that this introduction presents just one potential scenario. I'm not claiming this will happen, only that it could. Regardless of the path it takes, Bitcoin is poised for victory; our task is simply to hold on. Take the events of yesterday, for example: Bitcoin's gains were erased by a temporary glitch, only to recover by the evening. It's helpful to follow narratives, but don't let them consume you. If you're a HODLer, focus on doing your part.
Bitcoin Thoughts And Analysis
Yesterday’s candle was ridiculous. The reason is discussed in the news below.
The conclusion? Avoid using significant leverage in a volatile market.
Nothing has really changed here, outside of the nonsense.
Legacy Markets
Here are some of the main moves in markets:
U.S. equity futures rose as traders found positive signals in corporate earnings reports. S&P 500 contracts advanced after a two-day decline, while Nasdaq 100 futures extended Wednesday's rally. About three-quarters of U.S. corporate earnings have exceeded expectations, with Meta Platforms Inc. seeing an 11% rise in after-hours trading due to better-than-anticipated earnings. Treasury and dollar values remained steady ahead of U.S. GDP and jobless claims data, as well as the upcoming core PCE deflator. Evercore ISI's Krishna Guha suggests that the Fed may adjust interest rate increases due to potential tightening of credit conditions linked to banking turmoil, particularly in relation to First Republic Bank. In other news, pharmaceutical companies Sanofi and AstraZeneca reported strong earnings, while Deutsche Bank AG and Nomura Holdings Inc. experienced disappointing results. The Stoxx 600 Index turned higher, led by gains in drugmakers and banks. Oil prices fluctuated, gold traded near its highest level in a week, and Bitcoin continued to advance.
Stocks
S&P 500 futures rose 0.5% as of 6:59 a.m. New York time
Nasdaq 100 futures rose 0.8%
Futures on the Dow Jones Industrial Average rose 0.5%
The Stoxx Europe 600 rose 0.1%
The MSCI World index was little changed
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.1046
The British pound was little changed at $1.2468
The Japanese yen was little changed at 133.58 per dollar
Cryptocurrencies
Bitcoin rose 2% to $28,989.32
Ether rose 0.9% to $1,884.28
Bonds
The yield on 10-year Treasuries was little changed at 3.46%
Germany’s 10-year yield was little changed at 2.40%
Britain’s 10-year yield was little changed at 3.73%
Commodities
West Texas Intermediate crude was little changed
Gold futures rose 0.7% to $2,010.30 an ounce
Bitcoin Pitched To Mexico’s Congress
It's not every day that you have the opportunity to pitch Bitcoin to an entire nation's Congress that is receptive to your ideas. Samson Mow was granted this unique chance, alongside Mexican Senator Indira Kempis, and their presentation was exceptional. I've provided a paraphrased summary of what Samson shared with Congress below. Essentially, he argued that Mexico could follow a path similar to El Salvador's by adopting a Bitcoin standard. Samson is scheduled to speak at the 2023 Bitcoin conference, and we hope to learn about any progress being made on Mexico's front!
“There are a number of things a nation-state can do to adopt a Bitcoin strategy. The simplest one would simply be to add Bitcoin to the national treasury as a reserve asset, similar to gold or foreign currency reserves. The next one that I believe would be relatively simple to do would be to issue an instrument such as a Bitcoin bond to accumulate and mine Bitcoin. The third would be to work on a Bitcoin law, which would enshrine Bitcoin as legal tender and allow everyone to transact freely using Bitcoin.”
All Eyes Are On First Republic Bank
First Republic Bank shares plummet, reigniting fears about U.S. banking sector
There's no denying that Bitcoin's recent surge was closely tied to the challenges faced by the banking sector. The fate of First Republic Bank will likely influence Bitcoin and the broader market's response. Bitcoin could thrive in scenarios where liquidity provides relief or where banks face additional pressure. For the time being, the worst thing that could happen to Bitcoin in the short term is if the banking drama subsides and the world shifts its attention to other matters. While I don't wish for any failures, I do take pleasure in watching Bitcoin rise, as it serves as evidence of our success.
False Alarm!
Occasionally, price action in the market cannot be explained by narratives or technical analysis alone. Yesterday afternoon, blockchain analytics firm Arkham mistakenly notified its users that wallets associated with Mt. Gox and the U.S. government had moved significant amounts of Bitcoin. This alert spread rapidly, causing Bitcoin to lose all of its gains, only to quickly recover when the CEO tweeted that the alerts were due to a bug. It's astonishing how much panic selling occurred because of a false message, but I suppose that's just another typical day in the world of cryptocurrency.
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.