The Wolf Den #75 - Hacked, Bitcoin, Trades, Chart Requests
Hacked (From February)
I was the victim of a hacking attempt from a known hacker who targets public cryptocurrency holders. The past few days have been difficult, spending countless sleepless hours vigilantly changing passwords and getting my accounts and life locked down. It’s been a miserable experience, and one that I would not wish on my worst enemy (although I don’t have enemies).
Here’s what happened. I glanced down at my phone and noticed that it had no service. Strange, but not uncommon. I immediately started receiving emails about change password requests - email accounts, crypto exchanges etc. Warning. A hacker had called my phone carrier, convinced them (or paid them?) that they were me and swapped my sim into their own phone. This should be impossible, but clearly we cannot trust the phone companies to protect us. At that point, they had access to my phone number, texts and calls. This would allow them access to my 2 factor authorization if I was using SMS Authentication (I was not).
Presumably they had hacked me in advance, or gotten all of the information they needed to pretend to be me and to prepare to immediately start attempting to access my accounts. Scary.
They first thing they did was to hack my email provider and change the mx records on my main email account so that they would receive my emails instead of me. This way, they could start sending password resets and I would not know about it. Luckily I saw the first few come through before he deleted them. They would also, theoretically, have access to the texts coming for 2FA to confirm my identity. As of now, this did not work. Why?
Because I have all of my 2FA on a separate, offline device. This is the SINGLE thing that largely saved me from the most damage. Even with my logins and passwords, they were unable to access my 2FA (thus far, as I do not feel like I am in the clear). This gave me enough time to contact my banks, credit cards, crypto exchanges etc. and have my accounts locked. Key point - never use SMS verification as a part of your 2FA - they are counting on this vulnerability in a SIM-Swap attack. 2FA is a double edged sword - it offers protection when used correctly (on a separate device), but allows easy access to everything if it is simply a text message to your phone - because the hacker will be receiving your texts and calls.
Below is a definitive guide to SIM-Swapping. It is thorough, terrifying, but necessary. Read it, read it again, read it again. Slowly go through all of the steps to protect yourself. It will take time.
The silver lining of this experience is that it has forced me to reevaluate everything with regards to cyber security in general. Let’s just say that the hackers lit a serious fire under my ass.
The article above is very detailed and tells you everything you need. Here are a few ideas that you can do RIGHT NOW to help avoid this problem.
Call your phone company and tell them to put a sim lock on your phone. Ask what advanced options they offer for protecting your account. Push hard. Request that they never change anything on your account without you walking into a specific store location, near your home and showing ID. Be relentless, threaten to take your business elsewhere. There’s always another security precaution they can take on your behalf.
Make sure you have a separate email account and password (preferably encrypted email like protonmail) for every exchange. Have 2FA using an authenticator (google authenticator, authy, although AUTHY CAN BE HACKED etc) on a separate, offline device. NOT ON YOUR PRESENT PHONE. The minute they swap your sim card, everything on your present phone becomes a liability.
Get a Yubi key or another hardware 2FA device. Then nobody can access your accounts unless they are physically sitting at your computer. Get a separate one for each computer you use, and another that you have to put in for withdrawals.
Put 2FA on EVERYTHING. Facebook. Instagram. Twitter. Bank Accounts. EVERYTHING. Do NOT use SMS Authentication - do it on your separate device with an authenticator.
If you trade on your mobile, consider getting a separate phone altogether who’s number you never share just for trading. This one is supposed to be awesome. https://sirinlabs.com/. You can use GoogleFi sim cards to constantly change numbers if you are really serious.
If you do not have a separate phone, you can get a google phone number and use that everywhere that requires a phone number. That way if you are hacked the 2FA codes go to your secret google number. This number MUST REMAIN SECRET.
Start changing passwords now - this is something you should do often. Make them unique - never use the same password for ANYTHING.
Generally get away from using Gmail, Yahoo mail etc. Easy to hack. I cannot stress enough - encrypted email services with 2FA on a separate device.
STOP USING CHROME! It’s a piece of shit browser made by a company that is mining your data for profit. Th vulnerabilities are astounding.Use Firefox, Brave or another secure option.
Get a virus program for your computer, like Bitdefender. This has nothing to do with a sim swap, but it can still save your ass from viruses and phishing. Malware on your computer is an advanced way of getting the information the hacker needs before the sim swap. Remember, they knew exactly where to go the second they had control of my phone. This is a layer of protection, but not even enough.
Stop sharing everything online. I am extremely guilty of this, and for me it is very hard to put the cat back in the bag since I have been a public figure in the music world for decades. Look for anywhere your phone number, address and email address are available and delete them.
REMOVE YOUR PHONE NUMBER FROM CRYPTO EXCHANGES. Even if you set up 2FA with an authenticator, they usually have your phone number stored from your first authentication. BAD. Once your 2FA is set on an authenticator, go back and DELETE YOUR NUMBER.
Secure your Telegram - instructions are in the article, but Telegram is tied to your phone number. Bad.
Get your crypto off of exchanges and into cold storage. So simple, yet most do not do it.
This is really JUST THE BEGINNING. I know it’s annoying, frustrating, it “won’t happen to you” and none of this is “really necessary,” but I highly suggest going through the article above and doing as many of the things possible. It’s your life - don’t let someone else steal it.
Stimulus Is Running Out
(THIS WAS ORIGINALLY THE NEWSLETTER INTRO BEFORE I WAS HACKED!)
Stimulus is running out.
The United States government sent out $1200 stimulus checks to some Americans, checks that were never expected to carry people through the entire pandemic. That was 4 months ago and there are no formal plans to extend these benefits further. Even if there is another round of stimulus, it has been hinted that only American making less than 40K a year will receive a check.
As of June, a staggering 33 million people have received unemployment benefits in recent weeks. It’s a huge figure — and one that isn’t likely to change as industries continue to navigate business closures and financial losses that have resulted from the coronavirus pandemic.
Earlier this year, lawmakers temporarily provided recipients of unemployment with an additional $600 per week as part of the CARES Act. That expanded unemployment insurance (UI) is set to end after July 31, but it’s become increasingly evident that the need for such support hasn’t gone away.
What’s unclear, though, is whether Congress can agree on a plan to address the program’s fast-approaching expiration.
The $600 boost in UI is in addition to the weekly payment an unemployed individual gets from their state, which averages out to $370 per person (but varies by state). That’s a notable increase and one that’s been vital for those who have been furloughed or laid off during the pandemic. On average, unemployment insurance has historically only been enough to make up 40 percent of a worker’s previous pay.
Due to the timeline set by the original bill, the expansion in unemployment insurance isn’t slated to continue after the end of July — and thus far, lawmakers have yet to take any action to make sure that changes.
No plans for more stimulus. Unemployment benefits being reduced. PPP jobs likely to disappear. Coronavirus raging through America. Either the government needs to fire up the printers again in the very near future, or a lot of Americans will continue to suffer.
The Wolf Of All Streets Podcast Ft. Jason Williams
Jason Williams, Co-Founder of Morgan Creek Digital began his career after dropping out of Yale to pioneer an urgent care startup. What began as an entrepreneurial idea eventually turned into a business that transformed modern-day healthcare and led to a half-billion dollar exit. In 2015, he pivoted into Bitcoin, taking the red pill and aggressively stacking crypto. Today he publicly urges others to consider Bitcoin’s potential implications and value.
Jason and I further discuss dropping out of an Ivy league school, trying to become a billionaire, swallowing the red pill, stocks only going up, a potential 288k Bitcoin value, being SIM swapped 8 times, having the FBI on speed dial, Bitcoin becoming a world reserve currency, hiring a private army and obsessively and publicly buying large amounts of Bitcoin.
Options 101 - Calls And Puts
By Sahil Bloom
Options 101 - Call Options
Over the last few months, with the rise of Robinhood and the day trading boom, options trading has been featured prominently in the news (for better or for worse). But what is an option and how does it work? Here’s Options 101 - Call Options!
In simple terms, an option is a contract. It gives the buyer the right, but not the obligation, to buy (a “call”) or sell (a “put”) an asset. It specifies the price at which the asset can be bought or sold (“strike”) as well as a date this must occur before (“expiration”).
The buyer of the option has to pay to have that right to buy or sell. The “premium” is the price they pay for the option. Let’s use a simple example to illustrate how this works. In this thread, we will cover the call option. (Don’t worry, Bears, I’ll cover the put soon!)
Imagine you are in the market for a new house. You find the perfect one in a town nearby. You hear the town may get a nice new mall, so housing prices may rise quickly. Paul, the house’s owner, wants $1M for it. You don’t have that kind of money today, but you will soon.
You don’t want Paul to put the house on the market. You worry someone else will snatch it up! So you offer Paul a deal. You’ll pay him $50K today for the right to buy the house for $1M before December 31. Paul agrees to the deal.
Congratulations, you just bought a call option! Strike = $1M, Expiration = December 31, Premium = $50K
One of two scenarios now plays out:
(1) Mall Built = House Prices Up
(2) Mall Not Built = House Prices Down
In scenario 1, you “exercise” your option to buy the house for $1M. You are happy. The house is worth $1.2M now and you got it for $1M (plus the $50K option premium). In scenario 2, you don’t exercise. The house is now only worth $900K. You’re only out the $50K, so it’s ok.
So you were effectively in control of a $1M house for only $50K. There are more nuances to this - selling/writing, pricing dynamics - but we can save those for 102 and 103! I hope this was a helpful primer! Stay tuned for part 2 of Options 101, where I’ll cover put options.
Options 101 - Put Options
I can’t leave my Bears hanging (the market has done enough of that!), so it only feels right that I cover put options next. Here’s Options 101 - Put Options!
The easiest way to think of a put option is that it is an insurance policy. Imagine you own a house that is worth $1M. You live in California, so you worry about earthquakes. You decide to buy an insurance policy. So you call up your rich friend, Paul. You offer him a deal.
You will pay him for an insurance policy on the house with $1M of coverage. You’ll pay $50K for the policy, which will expire in December 2025. Paul accepts. Congratulations, you’ve just purchased a put option! Strike = $1M, Expiration = December 2025, Premium = $50K
You’re not as worried about an earthquake now. You’re covered! One of two scenarios now plays out:
(1) No Earthquake = House Fine
(2) Earthquake = House Damaged
In scenario 1, you don’t “exercise” your option. The house is fine. You’re only out the $50K premium - worth it for the peace of mind! In scenario 2, you exercise your option. The house is damaged. Paul pays you $500K for the damages. You’re happy you bought the insurance.
So to summarize the 101 series... Call Option = Bullish Bet Put Option = Bearish Bet Why buy options?
Speculate on price movements or Hedge long or short exposure. More to come on the nuances of options - pricing, selling/writing - in Options 102 and 103! Stay tuned...
PayPal Is Developing Crypto Capabilities
It's happening. The rumor that seemed likely to be fact that PayPal was moving towards enabling Bitcoin and crypto trading on their platform is now seemingly confirmed. Insiders have revealed that they are actively working to develop their crypto capabilities. I personally believe that this news, coupled with Venmo doing the same, is the most bullish thing that has happened in the space with regards to mainstream adoption. 320M people will be able to buy and sell Bitcoin through a platform that they know and trust, with the platform openly endorsing crypto and it's safety.
Fear & Greed - The Trader's Enemy
I once again defer to the wisdom of Peter Brandt. This is one of the most simple concepts in trading, but one that bears repeating over and over AND OVER again. Trading is a battle with your own emotions, most notably fear and greed. Greed causes us to hold trades beyond our targets. Fear makes us exit too early, move stop losses etc. Control your emotions, or you will blow up your account. Again.
My Recommended Platforms And Tools
Voyager
This is where I invest, commission-free. They now let you earn interest on your Bitcoin held in Voyager, so you can compound while trading. Not only that, you’ll get $25 in free BTC when you download & fund.
Rewards Code: Scott25
Phemex
This is where I trade with leverage and can also trade spot with no fees.
RoundlyX
I use RoundlyX to buy small amounts of Bitcoin every single day. They automatically round up my credit card purchases (with 10x multiplier) and invest them in crypto. Absolutely brilliant. Passively invest money you don’t need without a thought. Further, they have integrated with Voyager (see above) to offer commission-free purchases.
Rewards Code: WOLF
TexasWest Capital
This is where I spend my days teaching and learning! Our Discord group is a one stop shop for everything you need to learn to trade and control your emotions. Feel free to DM me on Twitter or respond to this email for questions.
Choice IRA by Kingdom Trust
Self-Directed IRA for Americans - allows you to invest in Bitcoin and any other asset for your retirement, with all of the tax benefits of a normal IRA.
Efani
Concierge Phone Service for Americans that protects your from SIM Swaps and other phone related hacks. I cannot stress enough how amazing this service is.
Ternio Blockcard
A new crypto rewards debit card that I have been testing and loving. I use both the virtual card online and the physical black card at actual retail (I will do this more after COVID!). They offer 6.38% cash back in crypto, which is really astounding.
BlockFi
BlockFI is where I personally store part of my long holdings. They offer up to 8.6% annually, compounding, depending on the asset (BTC, ETH or GUSD), which is much better than any legacy savings account or investment.
Follow me on Twitter at @scottmelker. This is where I am constantly updating my trades and sharing ideas.
Bitcoin Thoughts And Analysis
I would love to have something inspiring or prophetic to say about Bitcoin, but the fact remains that it is still chopping sideways. There was a bit of bearish movement today, but it quickly bounced a bit and remained (for now) above 9K. Momentum does looks slightly downward if you had to choose, but there's no reason to be jumping into any immediate trades. All analysis from the past few newsletters is completely relevant and still usable. Please revisit Tuesday and last week for a more thorough analysis.
Dips are still being bought up, but Bitcoin did lose a level that has been acting as strong support for a few days - around $9148. This was the first 4 hour close below that since July 5th, so it is worth watching. I would like to see that flipped back to support to feel more optimistic again. It is likely we see it at least retested as resistance. If your bias is bearish and you are looking for a short, there's good risk reward at trying one there. Price is also back in the big blue descending channel, which is the prevailing pattern for the moment. It's also still in a very local channel, as you can see. Both of these should eventually show a break to the upside, but that does not mean price can't drop first. It also does not mean they won't altogether fail and make us look silly.
Both the 50 and 200MAs are now resistance curving down and applying pressure on the 4-Hour. You can see that price completely topped out at both, also stopping an impending golden cross.
There are also reports of inflows into exchanges, which usually indicates there are large players who are considering selling. So keep that in mind. Revisit old emails for the potential entry points if price drops. I am generally watching $8700 or so, then the low $8000s... and of course $7777. I have been saying that a drop to these areas is very possible for months, so no surprises here. Here's the weekly chart.
Altcoins
As often is the case on Thursdays, Bitcoin looks shaky which makes alts harder to trade. PNT and SXP both made amazing moves after Tuesday's newsletter and both still look fine. Nice profits there. ONT has failed thus far to hold the support that I posted, so that was a failed trade. XRP has done a whole lot of nothing and has still not triggered.
HOT/USDT
This has been awesome to trade, even though it took a long time to play out. It is currently testing a key local support at 6872, and has wicked below and shown some buying demand. I like that. This appears to be bullish consolidation for another move up. The blue line breaking would signal continuation, that's the safest trade. Pink lines are targets. Remember, this broke the macro downtrend. I have done nothing on this except hold. I am being patient.
LINK/BTC
LINK is in price discovery, impossible to chart. I would say that it's a clear buy the dip opportunity until proven otherwise... but it could end anytime. Area of interest are basically any zone or line shown below. This is the most bullish asset in crypto, so odds are it will continue to outshine the rest.
Check out the weekly:
I have posted this before. Price was in an ascending channel that started the same day that LINK started trading. It finally broke above. Absolutely insane. On a macro level, you would expect for that channel to be retested as support. That could be a sick entry if it comes back down to earth.
TROY/BTC
This unfortunately moved before I finished the email, as I identified the trade early this morning. At this point, we want to see a flip of 54, or another retest of the black descending line (around 48) for an entry. I did not actually take the trade either, because I was busy dealing with the hack.
Last time I posted this was the double bottom shown, which hit it's target and is not longer relevant. That said, it's signal of a macro bottom, and any price action above the pink line keeps it that way. This should continue up.
Legacy Markets
I am still short TESLA, well in profit and feeling decent. I am also holding all of the other positions that have been discussed here.
CODX (CO DIAGNOSTICS)
Quick update from Tuesday - this is getting really close to a potential breakout. Eyes on the prize!
DYNT (DYNATRONICS)
Yet another COVID related play. I am already in from that demand zone shown, but the real move comes with a break of the descending line. At that point, the target becomes a move to the top of that line. For now, I have my stops comfortably below the demand zone. Flipping the 200 MA to support here would be really encouraging (red line).
Chart Requests
DGB/BTC
Interesting chart. We have a clear bull pennant that has formed after the large recent move. That said, when you have a pattern like this, you expect it to play out much earlier - the closer price gets to the apex, the less reliable the pattern is. You expect to see a move at around 60-70% of the way through the pattern. Right now, it's either long a break of the top line, or get out on a break of support. A break to the upside would theoretically send price flying, with a target from breakout of the length of the entire last pump - the flagpole.
ENJ/BTC
The last time I shared this as a trade was the blue descending wedge. This broke to the upside, as expected and has moved nicely since. Price is presently in an ascending blue channel - it can stay in this channel and continue up, which is bullish. A break of the bottom would be a sign that the uptrend is ending. 2077 has been strong resistance. I would prefer to see that flipped to support (lots of wicks through, no closes so far) before considering a trade here now.
ERD/BTC
Not even sure what to say about this chart. It is basically in price discovery and every dip is being bought up quickly and with volume. This seems to be a buy the dip asset until proven otherwise. It's impossible to really predict where it is going, since price has never been here before. At this point, you want to see 172 hold, which it did but with a big wick a few hours ago.
ICX/BTC
This came within a few percent of the target that I posted many weeks ago. This is still bullish, even with the drop today. I would look for a retest of the top of the black descending channel as support. If that fails, exit and expect some more downside. Good R/R in that area.
NOIA/BTC
Fundamentally a cool project - I actually had not checked the chart. This appears to be consolidation after a nice move up, which should theoretically lead to another break to the upside. The pattern is not clear yet. Key levels are marked.
NULS/BTC
Pretty ugly. We caught that bear div a while back which was a clear top and predicted this continuous sell off. Price continues to break support and retest as resistance. I can't see any reason to catch this knife for now. 4200 would be the next support.
RLC/BTC
Crazy chart. Massive inverse head and shoulders broke out days ago from the blue neckline and price has gone parabolic since. Key levels are marked. Hard to predict what will happen with a move like this, but it's very bullish - there just may be some retracement before continuation. Nothing bearish here, overall.
WAVES/BTC
This has been in a very clean ascending channel since 2019, shown in blue. Nothing bearish there overall. At present, we want to see it hold the 1550 area hold as support, which is been tested hard at the moment. Again, nothing overall bearish, but this could drop as far as the bottom of the channel if it keeps going. Key levels are marked. If you are trying to trade these really locally, now is a support test. I would not take the trade personally.
ZEN/BTC
Generally looks decent, I would want to see a break of the blue line. Price is consolidating against it hard. If Bitcoin behaves, I would expect a break to the upside. Key levels are marked.
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.