The Wolf Den #80 - Fake News, Bitcoin, Livestreams And More
Cointelegraph Crypto Traders Live
Cointelegraph Crypto Traders Live is today and is the the world’s largest live event fully dedicated to crypto trading. First, the artwork for the event is amazing, with all of us pictured as cartoons at the last supper - with the bitcoin emblem as Jesus. They are presenting over nine hours of nonstop crypto content, and more than 30 star speakers and crypto trading professionals - you can see the entire agenda on the link above. I am honored to be included among these absolute rockstars, as the moderator of the following panel:
4.30 PM EST: Keep Calm and Trade: How Not to Fall Into Emotional FOMO and Analyze Market Sentiment
Market sentiment is as important as fundamental and technical analysis, especially in the crypto space. What is it, and what tools to use?
Moderator: Scott Melker, Crypto Trader, Ex DJ & Podcast Host of The Wolf Of All Streets
Guests:
Mati Greenspan, Founder of Quantum Economics
Max Engelen, Head of Business Development at CryptoCompare
Mike McGlone, Senior Commodity Strategist, Bloomberg Intelligence
Come check it out later today and also tune into the rest of the panels. This is the definition of free alpha.
Grayscale Surpasses 5B In Assets Under Management
From Investopedia - "Assets under management (AUM) is the total market value of the investments that a person or entity manages on behalf of clients. Assets under management definitions and formulas vary by company."
You should be familiar with Grayscale by now, as they have brought Bitcoin and other crypto assets to the stock market for every day and institutional investors (GBTC, for example). They have now surpassed 5B AUM, an exceptionally high number in a short period of time. They have famously been buying more Bitcoin than is being mind, as there is clearly demand for it in their products. If you ever question whether institutional money is interested and invested in crypto, this is a clear sign that they are.
Ledger Database Hacked
Hardware wallet provider Ledger said its marketing database was breached between June and July
Yet another hack exposing the personal information of customers. This activity has become par for the course in crypto and beyond. No funds were affected, and this had absolutely nothing to do with their ability to secure your crypto with a hardware wallet - it's just a reminder that everyone's identity is at risk online.
Jim Fisk’s Civil War Big Short
By Sahil Bloom.
In 1865, a 30-year old financier named Jim Fisk made a fortune betting on the fall of the Confederacy. It was the original "big short" - a financial scheme you have to read to believe.
Who's up for a story?
Jim Fisk was on his last legs. The stockbroker had won over wealthy clients, but had failed to turn a profit in the bear market. In fact, he had lost it all.
Ever the optimistic schemer, he soon found what he believed was the opportunity of a lifetime. In 1865, the American Civil War was in its final stages. It appeared increasingly likely that the Union would defeat the Confederacy. While this defeat appeared certain, Fisk noticed that bonds issued by the Confederacy were trading in London at 35 cents on the dollar. Realizing the bonds would be a total loss (trade down to 0) in a Confederate defeat, Fisk created a plan. He would short Confederate bonds in London markets. But to make a killing, he had to be certain.
To execute this scheme to perfection, Fisk needed a few things to line up. He needed to know the moment the Confederacy was defeated. He needed to be the first one with that news in the London markets.
Fortuitously, the transatlantic telegraph system was down at the time. So Fisk set his plan in motion. He placed a fast steamer (with a co-conspirator onboard) to await his word in Halifax, the North American port closest to London. Upon receiving news of a Union breakthrough, Fisk bribed a telegraph operator to send his ship a message. "Go!" Without any direct lines of communication from America to London, that head start proved consequential. Fisk's co-conspirator reached London a full 5 days before the official news would arrive. In a few days, he had managed to short ~$5M in Confederate bonds (~$80M today). When the news arrived a few days later, the value of the Confederate bonds predictably collapsed. Fisk had made his fortune, pocketing somewhere in the realm of $4M (equivalent to $63M today).
For Fisk, the 30 year-old financial schemer, this was the score of a lifetime. Sadly, the story of Jim Fisk does not have a happy ending. He had soon squandered his newfound wealth in a series of ill-advised financial adventures (including an attempt to corner the gold market in 1869). In 1872, at 37, he was murdered by his business partner.
The story of Jim Fisk is one of incredible financial ingenuity. It is also a story of the risks of believing that one success is a guarantee of future successes. I hope you enjoyed this tale as much as I did.
Goldman Sachs - Dollar Reserve Role At Risk
Wow. Just wow. This is the first time that I can recall Goldman Sachs or any other major financial institution outright stating that the dollar is at risk of losing its reserve currency status.
"Real concerns around the longevity of the U.S. dollar as a reserve currency have started to emerge," wrote Goldman strategists including Daniel Sharp. "Gold is the currency of last resort, particularly in an environment like the current one where governments are debasing their fiat currencies and pushing real interest rates to all-time lows."
What Goldman is missing is that gold is not, in fact, the currency of last resort. That title belongs to bitcoin.
Currency is something that can be used as a medium of exchange and must have certain characteristics which have been known since at least the 1600s. Gold money lacks most of these: It’s not very durable, is hard to transport, is easy to counterfeit and is a variable store of value.
Bitcoin solves almost all of these problems, aside from the volatility which makes it a variable store of value as well. That is likely to change as we see increased inflation and the continued debasement of the dollar. As I have said countless times, a weak dollar is likely to equate to strong bitcoin.
PlusToken Scammers Arrested - Finally
This is huge news for the crypto community, as the PlusToken ponzi scheme was one of the most prolific scams ever perpetrated in our space. You may recall that much of the narrative about Bitcoin's sizable price drop was the theory that PlusToken scammers were market selling their holdings. Whether it was true or not, now we know that they will be unable to do that moving forward.
The Wolf Of All Streets Podcast Ft. Peter McCormack
Peter McCormack is the host of the “What Bitcoin Did Podcast,” “Defiance Podcast,” and “Defiance TV.” As a journalist and filmmaker he has covered some of the most pressing global issues such as tyranny, corrupt monetary systems, inequality and technological advancement. After accruing millions of downloads and views, he is currently setting out to be the best filmmaker he can be.
Peter and I further discuss, bitcoin as monetary defiance, traveling to Venezuela, impending stock market doom, Stockholm Syndrome, American politics at its best and worst, the Craig Wright defamation lawsuit, a personal letter from Ross Ulbricht, spending bitcoin to make a movie, overcoming hardship, making the best of life, and so much more.
How To Be Successful And Make Money Trading Crypto
I had the opportunity this morning to participate in a livestream with some of my favorite traders, the topic being "How to be successful and make money trading crypto. This was presented by Phemex, who you know are our sponsors! There are some real gems in this conversation from some amazing traders that I deeply respect.
Bitcoin Thoughts And Analysis
Bitcoin is decidedly bullish. It made its massive move that we discussed on Tuesday and has managed to hold the higher levels since. We could see some more retracement, but I think it's clear that we are in dip buying mode until proven otherwise. I am still long from the high $9,000s and added to my long at $10,800 on the dip today.
We want to see a monthly and weekly close above $10,540. That's really the confirmation we are looking for now that we have a macro higher high. Simple, but essential. A close above the pink line would be only the second time in history that Bitcoin has closed above that level.
The 4-Hour chart shows that Bitcoin appears to be making a bull pennant. Remember, these often lose support and turn into bull flags, becoming a parallel channel. That would not be a surprise at all. We saw some bear divs on lower time frames (not shown), but they largely seem to be followed by likely hidden bull divs. So we are seeing consolidation after a sizable move up on dropping volume... that's usually a sign that continuation is coming soon. Good for bitcoin, likely bad for alts.
Altcoin Charts
Altcoins had a small relief bounce the past few days, most of which look like bearish consolidation. As always tends to happen, many coins broke down hard when bitcoin moved, broke support and then "pumped" back up to test former support as resistance. That's how bulls get trapped and also how bear flags and pennants are formed.
My DUSK trade that I shared on Tuesday played out perfectly, hitting the target for the small 8-10% gain I spoke of. It was the only trade I shared, so I hope that some of you managed to catch it.
I am out of that and currently on the sideline with alts. If bitcoin makes another big move, I would expect them to suffer. This is one of those times when all altcoins are basically a huge basket and dependent on bitcoin's moves. We DO NOT NEED to force trades into the market. The best traders are patient and wait for the right time to trade. I will send a newsletter tomorrow if the market looks better.
That said, there are a few things that I am watching, but have low conviction and no plans to necessarily enter. Check the bull div on SXP in the chart requests section. If that confirms, it would likely be considered a good trade setup, although a break of the red line on that chart is better.
BTC DOMINANCE
Dominance appears to be consolidating at resistance - that usually means it will rise. For now, it is being "rejected" but if it breaks up, altcoins will likely suffer.
There's no reason to trade alts too heavily until we have a clear idea of what bitcoin and dominance are going to do.
COMP/BTC
This is dramatically oversold with bull divs on multiple time frames. Also, it's in a descending channel, rather than the ascending patterns (bear flags) that we are seeing on many alts. This could be good for a scalp if it breaks that top resistance, but I would be VERY careful. I am only watching this because it's so very oversold with that div. If never really saw a relief bounce.
If bitcoin moves, this will probably fail like everything else.
ETH/BTC
Ethereum is often a good chart to check to figure out was is likely to happen to altcoins in general. I am not presenting a trade here - just pointing out that it is testing and currently holding a key support level. If that holds, alts could start to do better. If it breaks down, I would expect more downside.
Legacy Markets
Nothing to share here today. Just wanted to mention that Tupperware hit both targets in a matter of days and pulled a 2X in only a week. That's probably my best stock call yet, so I hope you guys caught it!
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Bitcoin Thoughts And Analysis
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.
Chart Requests
BQX/BTC
It should be no mystery that I love Voyager! This has gone completely parabolic on the back of consistent amazing news from the company. Key levels are marked. This definitely seems to have broken its parabolic advance, as has happened with many coins. I could see an entry at this current support, if you believe that alts will do well. Otherwise, a break here and I would look at lower levels. Fibonacci also laid out here - you can see that it managed a 38.2% retrace of the current parabolic move, which could be "enough."
ETC/BTC
I have no real opinion on this and can't find much in the chart to give me a feeling either way. It "broke" resistance with no volume and has leaked sideways since. From a Fibonacci perspective, it has retraced almost 78.6%, which is more than enough to end a downtrend. But really this is just going sideways and likely to be affected by whatever bitcoin decides to do.
HTGM (HTG MOLECULAR)
A lot of potentially bullish things happening, although none are confirmed. A break of the black line would confirm a massive inverse head and shoulders, so that is something to watch for. Price is also forming a bull flag on the last move up, so a break above the top resistance of that pattern would be a bullish signal - which would likely lead to a breakout from the larger IHS and more movement up. All of this requires confirmation.
IAU (ISHARES GOLD TRUST)
This is at a REALLY key spot here. It is testing the all time high on the weekly chart, presently with a wick above. You really want to see this weekly candle close above $18.63, or else we will have a serious potentially bearish SFP - a wick above the previous swing high with a close below. This indicates a ton of selling interest at those levels. Also, with the gap up, a close below would leave this with a potential evening star pattern. You never want to see a gap up and then a shooting star type candle with a wick above a key level. Watch this to the weekly close for sure.
LEND/USDT
Bullish chart, has only read made macro higher lows on the way up. It did break structure a bit recently, but seems to have reversed back up after breaking the descending black line. At this point, you want to see the all time high broken and flipped to support, then you can enjoy price discovery. You do really want to see that higher high now though, to confirm that this has not broken structure before a bigger move down.
RLC/BTC
Massive sell off, no way to really look at this chart and figured out what is likely to happen next. We had the inverse head and shoulders break out right, but clearly the parabolic move up is broken now. This would be catching a falling knife here, although holding 10599 as support here would be a positive first sign that this "could" be bottoming. Also a beautiful golden pocket retrace, so if you are a fib trader, I could see taking an entry here.
STPT/BTC
I don't see anything compelling here for a long. Clear breakdown of the red ascending support and a key horizontal level at 164. Recapturing 164 as support would be the first bullish signal here. Looks like it's consolidating after the drop down, which usually means more downside is expected. No certainty here, but hard to have conviction that this will rise from here.
SXP/BTC
We made some great gains on this pair over the past couple of weeks and finally stopped out on the last trade when bitcoin made its move. I am looking for another entry. We have potential bullish divergence with oversold RSI on the 4 hour chart here, which is a great sign - but needs to be confirmed by a definitive elbow up on RSI and a clear lower candle close with price. Nothing to celebrate here yet. Safest entry is a break of the red descending resistance. 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.