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In This Issue:
There Are No Heroes In Crypto
Bitcoin Thoughts And Analysis
Legacy Markets
The Daily Close
Unveiling the Trader's Mindset: Key Lessons from "Trading in the Zone"
Azuki Loses Trust - Floor Price Plummets
Bloomberg Believes Grayscale Will (Most Likely) Win
ARK Jumps To The Front Of The Line
Michael Saylor Is Leagues Ahead
Michael Saylor Buys $347 Million Worth Of Bitcoin | Prime Trust & TUSD Saga | Celsius Altcoin Dump?
There Are No Heroes In Crypto
In the wild world of markets, the idea of heroes can be a tricky illusion that leads us to poor ideas and risky choices. How many times in your crypto journey have you leaned on the wisdom of a ‘hero’ only to crash and burn chasing fast bucks, ignoring risk management or getting swept up in crowd thinking? We've all been there, and if you haven't yet, count yourself lucky.
As we eye the potential start of a bull market, here's a piece of advice you might not expect - ditch your heroes! Let me break down what I mean - and what I don't. As an investor, you should never stop learning from the greats. It's free wisdom and their strategies can pay off big time. Mimicking their big-picture ideas and finding similar success can feel great, so give it a shot.
But here's what you should NOT do - don't blindly copy others' moves. Markets are way too complex to steer through with a one-track mind that isn't yours. And don't worship others' ideas, no matter how smart they seem or how well they've done. Even the big shots pick holes in each other's methods - you should be just as critical when taking advice from them.
In our crypto world, the allure of hero figures can be powerful. It can give you a false sense of being invincible or make you believe in perfect market predictions. Michael Saylor is often seen as a ‘hero’ and sure, he's a great role model, but remember he's taken huge risks to get where he is. A hero’s strategy works for them because it's tailored to their market view, strengths and weaknesses, and their appetite for risk at that specific time.
Once the bull market really kicks off, it's going to be tempting to follow a ‘hero's’ path. Their wins will always seem just within reach, but always just out of your grasp. Instead of chasing heroes, start building your own confidence. We made it through the bear market, we're all capable of hitting it big in our own way. Don't give up your self-respect to imitate a hero. Keep questioning everything and be your own hero.
That's what crypto's all about.
Bitcoin Thoughts And Analysis
There is obviously very little to see on the Bitcoin chart for now after last week’s large move. Price is consolidating. To me, it appears to be bullish consolidation in a descending wedge, which look like a bull flag on some other exchange charts. Each chart looks different, because the lows and highs of wicks and closes can vary from chart to chart.
Either way, this looks like bullish consolidation - price made a high and is now drifting sideways and down on decreasing volume. That usually means volume will come in on a break out to the upside.
Legacy Markets
Stocks have risen as traders focus on strong company earnings, despite central bank pledges to increase interest rates. Europe's Stoxx 600, Nasdaq 100 Index, and S&P 500 all saw gains, buoyed by robust performance from companies such as Renault SA, Hennes & Mauritz AB, Micron Technology Inc., and financial firms Bank of America Corp. and Wells Fargo & Co. Central bank heads, including Federal Reserve Chair Jerome Powell, European Central Bank President Christine Lagarde, and Bank of England Governor Andrew Bailey, indicated that interest rates will rise to curb inflation, yet this didn't deter market optimism. Analysts suggest that unless there is a significant negative shift in earnings outlook, particularly in tech and AI sectors, markets will remain resilient. This optimism is further supported by positive US economic data, including consumer confidence and home sales, alongside an expected 1.4% annualized expansion of Q1 GDP.
Key events this week:
Eurozone economic confidence, consumer confidence, Thursday
US GDP, initial jobless claims, Thursday
Atlanta Fed President Rafael Bostic speaks, Thursday
China manufacturing PMI, non-manufacturing PMI, balance of payments, Friday
US personal income and spending, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.1% as of 9:43 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 fell 0.3%
The MSCI Emerging Markets Index fell 0.5%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0919
The Japanese yen rose 0.1% to 144.30 per dollar
The offshore yuan fell 0.1% to 7.2527 per dollar
The British pound was little changed at $1.2648
Cryptocurrencies
Bitcoin rose 1% to $30,399.5
Ether rose 0.9% to $1,847.74
Bonds
The yield on 10-year Treasuries advanced three basis points to 3.74%
Germany’s 10-year yield advanced four basis points to 2.35%
Britain’s 10-year yield advanced three basis points to 4.35%
Commodities
Brent crude rose 0.4% to $74.36 a barrel
Spot gold was little changed
The Daily Close
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Unveiling the Trader's Mindset: Key Lessons from "Trading in the Zone"
In "Trading in the Zone," Mark Douglas explores the critical mental aspects of trading, asserting that the difference between winners and losers isn't knowledge of the markets but how they respond psychologically to wins and losses. As we delve into the key lessons from this pivotal book, you'll gain insights into the essential principles of trading psychology.
1. Trading is a Probability Game
One of the main points Douglas drives home is that trading is fundamentally a game of probabilities. There are no certainties, only odds. Successful traders understand this inherently and execute each trade without hesitation, without fear of losses, and without the elation of potential gains.
It's essential to understand that each trade is just one of a series of trades, and the outcome of a single trade doesn't determine your success as a trader. By accepting the inherent uncertainty and focusing on the execution of a proven trading plan, you position yourself for long-term success.
2. Embrace a Consistent Trading Approach
Douglas emphasizes the need for a consistently applied trading methodology. Many traders change their strategies frequently, especially after a loss, which leads to inconsistency. It's critical to have a well-thought-out trading plan and stick to it, adjusting only as you gather significant data or new insights about market dynamics.
3. Mindset Over Methodology
Although a solid trading methodology is crucial, Douglas argues that the mindset is even more vital. Even the best trading plan can fail if the trader's mindset isn't aligned with the principles of successful trading.
Douglas suggests that traders often bring their harmful beliefs about self-worth, fear, greed, and the need for control to the trading desk. These beliefs hinder their ability to implement their trading plan effectively. He contends that success comes when you believe you are a consistent winner, detach your emotions from trading, and let go of the need to control the market.
4. The Market's Only Certainty is its Uncertainty
Douglas stresses that the only constant in the market is its uncertainty. The market doesn't move according to our wishes, and it owes us nothing. Once a trader accepts this reality, they can trade objectively, without being controlled by fear or greed.
A crucial part of dealing with this uncertainty is managing risk. Douglas encourages traders to define their risk upfront, only risking a small percentage of their trading capital on each trade. By limiting losses, a trader can stay in the game longer and have more opportunities for successful trades.
5. Discipline and Responsibility
The last lesson is the importance of discipline and accepting responsibility for all trade outcomes. Blaming the market, bad luck, or erroneous information for losses leads to a victim mindset. It prevents learning and improvement. Traders must accept that they alone are responsible for their trading decisions and their consequences.
Discipline, on the other hand, is about following the trading plan and the rules set for trading, even when emotions are high. Discipline in trading leads to consistency, and with consistency, the law of large numbers starts to play in favor of the trader.
"Trading in the Zone" takes us on a journey into the psychology of trading, revealing that the key to trading success lies not in market knowledge but in self-knowledge. By addressing our flawed beliefs, developing a consistent trading plan, and maintaining discipline, we can navigate the uncertainties of the market and increase our chances of long-term trading success.
Azuki Loses Trust - Floor Price Plummets
Azuki has recently experienced a notable loss of trust within the NFT community, a community it has worked tirelessly to establish since early 2022. The saga kicked off with an announcement by Azuki co-founder, Zagabond, at a much-awaited event in Las Vegas. He revealed that a new collection, 'Elementals', was set to launch soon. This announcement caused quite a stir in the Azuki community as it was expected that each Azuki holder would be airdropped an NFT from the new collection, with the remainder set for auction.
However, when the Elementals were released, community excitement quickly turned into dismay. The new collection seemed to be a direct copy of the Azukis, betraying the expectations of unique 'elements.' Side-by-side comparisons of the artwork laid bare the uncomfortable similarities. The Elementals, originally touted to comprise 20,000 'unique' NFTs, instead effectively increased the Azuki supply from 10,000 to 30,000 - quite a shocker.
The current floor price for Azuki is hovering around 9 ETH, a significant drop from the 17 ETH earlier this month. Despite the Azuki team's apology for the mishap, the damage has been inflicted. With the supply now essentially tripled, the Elementals are trading at a mere fraction of their potential value had this debacle been avoided. While Azuki may promise to learn from their 'errors,' recouping the $40m in sales is a steep hill to climb.
Bloomberg Believes Grayscale Will (Most Likely) Win
Consensus is that Grayscale is currently leading in its face-off with the SEC. Bloomberg even predicts that Grayscale's likelihood of winning against the SEC is 20% higher than the SEC approving BlackRock’s ETF (70% vs 50%). As stated by Grayscale CEO Michael Sonnenshein, the SEC’s decision is expected anytime between now and the end of Q3. Thanks to these positive developments, Grayscale’s GBTC premium has climbed to -29.8%. However, don't anticipate the premium to disappear until the SEC confirms the allowance of a transition to an ETF structure. Here's Bloomberg’s analysis explaining their 70% prediction.
Grayscale has a 70% chance of winning its lawsuit against the SEC over the company’s bid to convert the Grayscale Bitcoin Trust (GBTC) to a Bitcoin ETF, we believe. The odds increased from 40% after the parties’ oral arguments reached completion because “all three judges on the panel appeared to side with Grayscale” based on their “lines of questioning. The SEC and Chair Gary Gensler may be bracing for a loss and looking to preemptively soften it or make it meaningless by approving a spot Bitcoin ETF application before or around the same time as a court decision.
ARK Jumps To The Front Of The Line
The ETF race just took an exciting turn. ARK has now amended its ETF filing to incorporate a surveillance-sharing agreement, placing them next in line for SEC approval (technically, they've been in the lead from the start). ARK’s 21 Shares Bitcoin ETF, due on August 13th, is slated 6 days prior to BlackRock’s iShares Bitcoin Trust. ARK's move triggers intriguing questions - Will the SEC follow the queue or play favorites? Will BlackRock resist ARK's decision to enter a surveillance-sharing agreement with Coinbase? Will Gary Gensler endorse an ETF to impact the Grayscale decision? The competition is heating up and August is set to be a monumental month for crypto.
Michael Saylor Is Leagues Ahead
We're nearing a point where it's almost taken for granted that no other company may ever own as much Bitcoin as MicroStrategy. In their recent move, MicroStrategy snapped up an additional 12,333 BTC for approximately $347.0 million, with an average price of $28,136 per Bitcoin, marking this as one of their biggest buys yet. This purchase takes MicroStrategy's total holdings to a staggering 152,333 BTC, acquired at an average price of $29,668 per Bitcoin. Given the current state of affairs, very few entities will be able to match Michael Saylor’s position without shelling out a hefty sum to do so.
Michael Saylor Buys $347 Million Worth Of Bitcoin | Prime Trust & TUSD Saga | Celsius Altcoin Dump?
Join Joshua Frank, Michael Maloney as we discuss TUSD and Prime Trust saga, while Chris Inks and Crypto Birb join me to share their trading ideas.
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.