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In This Issue:
Embrace The Suck
Twitter Spaces Today
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
What Are BRC-20 Tokens?
Ripple and The UAE
A Month Of Pleasure For Years Of Pain
Bittrex Goes Bankrupt
Banking Crisis & Crypto Adoption | Macro Monday With Dave Weisberger & Mike McGlone
Embrace The Suck
Have you ever found yourself despising the investments you've made? A type of loathing that festers in your stomach, tugging at your insides every time you buy more of an asset, glance at it, or even think of it? If you're serious about investing, chances are you'll experience this emotion at least once a year.
I'm not talking about the kind of hatred felt by a Celsius or Voyager creditor, but rather a deep-seated, gut-wrenching resentment that arises from watching other assets outperform while yours underperforms. As agonizing as this feeling is, would you believe me if I told you it's a good sign you're on the right track?
Recall when Bitcoin dropped to the mid $3,000s after having reached nearly $20,000 just a year prior. Investors were filled with hatred, resentment, betrayal, and disgust. Those who lacked exposure, like Warren Buffet, Charlie Munger, Nouriel Roubini, and Jamie Dimon, were the only ones feeling euphoric.
Remember the sentiment when Bitcoin corrected to the mid $15,000s around the time of the FTX collapse? Hatred resurfaced, affecting nearly everyone in the space, regardless of their exposure to the collapsing platform - it left everyone feeling sick.
Take a look at the image below. I tweeted this while I felt like my guts were spilling onto the floor and it only got worse… this was before FTX collapsed.
I'm not suggesting that investors should abandon caution when shit hits the fan and recklessly buy assets. Instead, I recommend that we all do a better job of monitoring our emotions as we experience them. Conversely, do you recall the last time you purchased something you loved? How did that turn out?
In both late 2017 and late 2021, investors adored their crypto, but buying around that time proved disastrous. Both love and hate are emotions that investors must balance to maintain a diversified portfolio. When one asset class surges in one direction, another class often moves in the opposite direction. Historically, stocks and bonds exhibit this relationship.
As cryptocurrencies struggled in 2022, real estate soared to unprecedented heights. Instances of turmoil abound; what matters is how we respond and adjust our investments.
A quote from TIME in late 2007 aptly illustrates this point:
“Some investors are so keenly aware of this tendency to get spooked by market mayhem that they view their own fear as a sign that things are about to turn around and that it's time to buy. Jeff Vinik, a legendary investor in the U.S., once told me: "I'm scared at almost every [market] low. And I try to remember, when I'm really scared, that we're getting real close to a good low." Zweig cites another renowned investor, Brian Posner, who quips: "If it makes me feel like I want to throw up, I can be pretty sure it's a great investment."
Buying at these moments of acute uncertainty takes an emotional toll. Guy Spier, a friend who runs a hedge fund in New York, says he's bought several battered stocks lately, knowing that "You make your money in the panics, then collect it when everything is fine again." But "it's agonizingly difficult," he admits. "The rational part of your brain is struggling with all these emotions, which are telling you: 'This company is going bust!'
In summary, don't be too hard on yourself if you're frustrated with your investments.
Just keep these points in mind:
Others in the same position share your feelings.
Your emotions likely indicate that your investment is on the right track, assuming you've done your research.
It's normal and expected for emotions to fluctuate in a diversified portfolio.
Rebalancing is beneficial; take from what you love and give to what you hate.
Embrace the hate and remember that investing isn't easy.
If investing were easy, everyone would excel at it. If everyone were perfect investors, markets would always be fairly priced, rendering investing ineffective. Our emotional struggles are what make investing possible and, for those with thick skin, even enjoyable. In the end, while victories are satisfying, the journey is often more memorable than the final outcome.
As for the current state of the crypto market, most investors aren't feeling hatred, but love isn't prevalent either. Many investors are caught between frustration and contentment - suggesting better times lie ahead.
Twitter Spaces Today
Bitcoin and Ethereum are congested and expensive. This means we need Layer 2s. I’m speaking with Sandeep from Polygon and Muneeb from Stacks at 11 AM EST, live. You can join HERE.
Bitcoin Thoughts And Analysis
Bitcoin continues to range. This is not a trending market. That said, RSI is once again oversold on the 4-hour chart, giving us the opportunity to watch for potential bullish divergence. If price makes a lower low and RSI make a higher low and then we see a clear elbow up, we will have our signal and a likely local bottom
Otherwise, we are still effectively sideways.
Altcoin Charts
There are not enough disclaimers and warnings in the world for when I share altcoin charts, especially slightly more obscure ones like Bitget. As you know, they were a long time sponsor and during that time I bought quite a bit of BGB to have “skin in the game.” I sold quite a bit of that on the move up from 23 cents to 50 cents and am still holding a significant stack. So I am not trading this. It is also only available on a few exchanges, but can be traded on Bitget if you have an account or if you sign up.
As for the chart, we have a huge pennant and an attempted breakout on increasing volume. We really want see a close above the descending blue resistance, not just the wick above. The volume spike is what really gets my attention.
This should easily make a 10% + move with that break, back to all time high, but I am looking for much higher prices and price discovery above the all time high if we see this confirm.
I would keep risk well managed (as always) and position size relatively small on a trade like this.
Legacy Markets
Markets experienced a downturn as European stocks, US futures, and oil traded lower on Tuesday, following Swedish landlord SBB's halted dividends and weaker-than-expected economic data from China. SBB shares fell 5.5%, contributing to concerns about a funding squeeze in the real estate industry. Chinese import data revealed a weaker economic recovery than anticipated, causing the Hang Seng Index to lose over 2%. Despite this, Palantir Technologies and Saudi oil producer Aramco saw gains, while PayPal Holdings and PacWest Bancorp experienced losses.
Key events this week:
US President Joe Biden scheduled to meet with congressional leaders on debt limit, Tuesday
New York Fed President John Williams speaks to Economic Club of New York, Tuesday
US CPI, Wednesday
China PPI, CPI, Thursday
UK BOE rate decision, industrial production, GDP, Thursday
US PPI, initial jobless claims, Thursday
Group of Seven finance minister and central bank governors meet in Japan, Thursday
US University of Michigan consumer sentiment, Friday
Fed Governor Philip Jefferson and St. Louis Fed President James Bullard participate in panel discussion on monetary policy at Stanford University, Friday.
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.5% as of 10:07 a.m. London time
S&P 500 futures fell 0.3%
Nasdaq 100 futures fell 0.3%
Futures on the Dow Jones Industrial Average fell 0.3%
The MSCI Asia Pacific Index fell 0.2%
The MSCI Emerging Markets Index fell 0.8%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro fell 0.2% to $1.0984
The Japanese yen was little changed at 135.09 per dollar
The offshore yuan slipped 0.1%, more than any closing loss since May 1
The British pound was little changed at $1.2616
Cryptocurrencies
Bitcoin was little changed at $27,559.05
Ether was little changed at $1,840.10
Bonds
The yield on 10-year Treasuries declined one basis point to 3.50%
Germany’s 10-year yield advanced one basis point to 2.33%
Britain’s 10-year yield advanced four basis points to 3.82%
Commodities
Brent crude fell 0.6% to $76.17 a barrel
Spot gold rose 0.2% to $2,025.28 an ounce
What Are BRC-20 Tokens?
For those of you looking to explore the next frontier in crypto, it's time to get serious about understanding the BRC-20 standard. While my holdings are currently limited to Bitcoin, I have no doubt that an influx of capital will follow once access becomes more straightforward. At the moment, speculators require a Taproot-enabled Bitcoin wallet connected to an exchange that supports ordinals, inscriptions, and the BRC-20 standard.
The total market capitalization of tokens created on Bitcoin is approximately $1 billion, with a significant portion attributed to Ordi, a leading meme coin boasting a market cap of around half a million dollars. I recommend the linked article as a valuable starting point for education on this topic. If you plan on attending the Bitcoin conference, brace yourself for the lively debates that are likely to emerge when discussing the BRC-20 standard.
Ripple and The UAE
Years of legal battles have culminated in a substantial cost for Ripple - $200 million, to be precise. CEO Brad Garlinghouse disclosed this figure yesterday at the Dubai Fintech Summit, where he commended the United Arab Emirates' Virtual Asset Regulatory Authority (VARA) for its more crypto-friendly approach compared to the US. In relation to the UAE, Coinbase is eyeing the region as a potential crypto hub. It wouldn't be surprising to see the launch of Coinbase International Exchange in the area soon.
A Month Of Pleasure For Years Of Pain
The past month has been exhilarating for Pepe holders who remained steadfast in their positions, but the party will inevitably come to an end. Have you ever wondered why Doge or Shiba maintain massive market capitalizations? It's because some traders were never willing to let go, and the same will likely happen with Pepe. The tales of traders who transformed $27 into $1 million will soon be overshadowed by longer-lasting downturns. Dune Analytics reports that there are approximately 145,000 Pepe holders, and it would be surprising if more than 10% manage to secure a decent profit.
Bittrex Goes Bankrupt
Bittrex filed for bankruptcy less than a month after the Securities and Exchange Commission (SEC) charged it with operating an unregistered securities exchange. The Seattle-based company halted US operations in late April, but its global platform in Liechtenstein remains unaffected. Bittrex, founded in 2014, has over 100,000 US-based creditors and estimated liabilities between $500 million and $1 billion. US customers who haven't withdrawn their funds will have to wait for the bankruptcy process to determine distribution methods. The US Treasury’s Office of Foreign Asset Control is listed as the largest creditor, with a claim exceeding $24 million. The SEC, also a creditor, sued Bittrex last month, alleging six crypto tokens are securities.
For many of us, Bittrex was the first place that we traded altcoins, and solely on BTC pairs. This is where I personally cut my teeth in crypto trading, so it is a sad day.
Banking Crisis & Crypto Adoption | Macro Monday With Dave Weisberger & Mike McGlone
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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.