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In This Issue:
Some Shortcuts Are Best Left Untaken
Bitcoin Gets An Uptober Boost
Altcoin Thoughts
Bond Yields Set New Highs, Dollar Rips, Bitcoin Doesn’t Care
Arthur Hayes Is Asking The Important Questions
Will Ross Ulbricht Be Pardoned This Election?
SBF’s Trial Begins Tomorrow
The 3 Key Factors That Will Bring 1 Billion People To Crypto | Mo Shaikh, Aptos Labs
Some Shortcuts Are Best Left Untaken
As the bull market is shaping up, it’s a matter of time until the crypto space is once again inundated by enticing shortcuts at every turn, promising wealth if you follow a few simple steps. These shortcuts come in various forms, often urging you to bet your entire portfolio on a supposed 'sure thing,' whether it's a trading system or a specific cryptocurrency.
Seasoned investors tend to assume that only newcomers fall for these traps, but many victims are experienced traders and investors who have grown impatient over time. The longer the market takes to move in a favorable direction, the more likely it becomes for even the most seasoned traders to let their guard down. Scammers are well aware of this and exploit this psychology to their advantage. They showcase their lavish lifestyles on Instagram, flaunting Rolex watches and Ferraris outside opulent waterfront mansions in Miami, all to convey the message: 'If they can do it, so can you,' right?
Wrong.
When was the last time you saw Warren Buffett, George Soros, Ray Dalio, Steve Cohen, Bill Ackman, Carl Icahn, or any of the other greats behave in such a manner? Shouldn't they be the ones publicly boarding private jets and showcasing their jewelry?
They don't need to, because they aren't trying to sell you anything.
Have you heard the story of the time when Warren Buffet’s business partner needed to make a phone call from a pay phone and asked Buffet for a dime? He reached into his pocket, pulled out a quarter, and set off to get change. Buffet, one of the richest investors on the planet is known to be incredibly stingy. Maybe there is something to learn there.
But before I get too off-topic, let's dissect some of the most common shortcuts in the crypto space.
Mistaking An Inch For A Mile
Solana bulls appear to have awakened from their hibernation after a +17% surge this past week, and now the prevailing sentiment is that Solana is 'on the brink of changing the world.' I have no qualms with Solana - yes, there are risks associated with it - but a solitary price swing or news event should not drastically change your feelings on a project. Crypto bros love to celebrate, myself included, but it's important not to lose sight of the long-term objective over minor victories. Solana integrating with Visa was far more promising and it seems as if that news is long forgotten.
Slipping Down The Risk Curve
Both false confidence and genuine success can spawn the desire for investors to kick it up a notch and move towards ‘greener fields.’ What they are actually doing is moving further and further away from profitability and closer to a negative return. If it was so easy, everyone would do it. Properly moving down the risk curve requires additional diligence, patience, conviction, and research, attributes that many traders and investors are not ready to stomach or exhibit. If it ain’t broke, don't fix it!
Investing In People Rather Than Assets
It's exceedingly uncommon to encounter an individual in the crypto space who isn't guided or influenced by others, operating solely based on their own judgment. As investors spend more time in the crypto world, they may become increasingly inclined to prioritize following a crypto personality over managing their own portfolio, and this can be risky. Many of the original crypto enthusiasts who exit the space do so because they relied on someone else's advice to buy back at a lower price. My suggestion is to heed advice from multiple 'experts' who may hold conflicting viewpoints. This approach will compel you to make independent decisions that prioritize the well-being of your portfolio.
Leverage
This is the kiss of death that leaves more traders in crypto broke than anything else. You see it all the time - traders are desperate to “earn it all back” on one trade or want to amplify the size of their bets. Leverage is readily available and abused like a drug. It’s a fast track to rock bottom. Leverage is a tool designed for the big players to minimize risk. Most traders should never touch leverage and those that do should only be using it in very small doses. As the bull market kicks into effect, expect to see more traders ‘winning’ with leverage. Don't fall for this crap, turn your head and look the other way.
Ignoring Basic Security Practices
In a bear market, tales of hacks, scams, and attacks tend to dominate the headlines, aligning with the prevailing sentiment. However, in a bull market, these incidents tend to be brushed aside as if they never occurred. Security remains a critical concern regardless of market conditions—whether it's in a downturn or a surge. If anything, scammers find more opportunities when the community's guard is down, and wallets become ripe for the picking. There's no better time than today to reevaluate the security of your assets. Ensuring your safety doesn't take much time, what does take time is trying to earn it all back from the beginning.
As George Soros once said, “If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.”
Bitcoin Gets An Uptober Boost
Happy Uptober, to this who celebrate.
As has happened many times (including the end of the bull run in 2021), Bitcoin pumped immediately when the calendar switched from September to October. Amazing.
As you can see, price rose right to the 200 MA on the weekly, so the next weekly close will be meaningful - above or below?
Nice to see a big green weekly candle after repeatedly holding the $25,000 support.
As I said many times, there was no real cause for concern as long as that support held.
First the daily 50 MA was finally broken, now price is attacking the 200 MA. It has not closed above yet, so don’t listen to the excitable traders on X. We want to see a clear close above that red line.
Look where this move ended - $28,473, right at the key resistance.
As I have mentioned, we basically have 2 local ranges - $25,000 to $28,500 and $28,500 to $31,000. We want to start closing candles above the $28,500 area and enter that next range.
You can also see that price, once again, followed a bullish divergence with oversold RSI. Now RSI is heading into overbought.
We followed this move the entire way. Just showing once again the power of drawing resistance on an indicator to give us a hint when price may follow.
Altcoin Thoughts
Altcoins are up… but less than Bitcoin. Hard to get excited for the moment, as the moves continue to be led by the honey badger.
There will be a time when altcoins go mad and outperform Bitcoin, but that still does not appear to be now.
Bond Yields Set New Highs, Dollar Rips, Bitcoin Doesn’t Care
The global bond market saw a selloff, pushing 10-year U.S. Treasury yields to their highest since 2007. This comes as investors await guidance on interest rates from Federal Reserve Chief Jerome Powell. While a recent deal among U.S. lawmakers prevented a government shutdown, giving stocks a temporary boost, the focus is shifting back to the potential for rate hikes, especially as rising oil prices could stoke inflation. Traders are now placing higher bets on a rate hike in November by the Fed. In other market movements, cryptocurrency-related stocks rose alongside a six-week high in Bitcoin, while the dollar continued to strengthen.
Key events this week:
China has week-long holiday
Bank of England policy maker Catherine Mann speaks on monetary policy, Monday
Fed Chair Jerome Powell and Philadelphia Fed President Patrick Harker participate in a roundtable discussion, Monday
New York Fed President John Williams moderates discussion on climate risk, Monday
Cleveland Fed President Loretta Mester speaks on economic outlook, Monday
US ISM manufacturing index, Monday
Australia rate decision, Tuesday
Atlanta Fed President Raphael Bostic speaks on economic outlook and inflation, Tuesday
August US JOLTS report, Tuesday
Eurozone services and composite PMIs, Wednesday
ECB President Christine Lagarde gives welcome address at conference, Wednesday
US ISM services index, Wednesday
France industrial production, Thursday
BOE Deputy Governor Ben Broadbent, Riksbank First Deputy Governor Anna Breman participate at panel discussion, Thursday
San Francisco Fed President Mary Daly speaks at the Economic Club of New York, Thursday
Germany factory orders, Friday
September US nonfarm payrolls, Friday
Stocks
The Stoxx Europe 600 fell 0.2% as of 12:40 p.m. London time
S&P 500 futures were little changed
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 was little changed
Currencies
The Bloomberg Dollar Spot Index rose 0.2%
The euro fell 0.3% to $1.0542
The Japanese yen fell 0.2% to 149.73 per dollar
The offshore yuan fell 0.1% to 7.3011 per dollar
The British pound fell 0.3% to $1.2162
Cryptocurrencies
Bitcoin rose 4.5% to $28,333.75
Ether rose 3.4% to $1,730.9
Bonds
The yield on 10-year Treasuries advanced six basis points to 4.63%
Germany’s 10-year yield advanced three basis points to 2.87%
Britain’s 10-year yield advanced three basis points to 4.47%
Commodities
Brent crude rose 0.8% to $92.95 a barrel
Spot gold fell 0.6% to $1,836.95 an ounce
Asking The Important Questions
There’s no denying that Arthur Hayes has established a perma-bull reputation in the crypto space, but what I like about his latest blog is his willingness to explore the possibility of his central thesis being wrong. Similar to many of us armchair crypto experts, Hayes was certain that the Fed would stop raising rates after the banking collapse in March. However, since then, the Fed has increased rates three more times
“It seemed the Fed’s only option was to cut rates, restore the health of the US banking system, and watch Bitcoin quickly march toward $70,000…When your predictions are consistently wrong, it is time to reexamine what you believe to be true and explore a few ‘what if I continue to be wrong’ scenarios. In this case, that means starting to work through whether my portfolio can survive a Fed that keeps hiking rates.”
If you'd like to see how Hayes addresses these questions - What if there is no US recession? What if inflation doesn't decline? What if there is no US financial system meltdown? - then click the link above, it won’t disappoint.
Will Ross Ulbricht Be Pardoned This Election?
Sadly, there is no recent update on the Ross Ulbricht prison situation. However, with an upcoming US presidential election, there is a glimmer of hope for a potential pardon. In 2015, Ross Ulbricht was convicted of numerous offenses, including engaging in a continuing criminal enterprise, distributing narcotics, distributing narcotics by means of the internet, conspiracy to distribute narcotics, conspiracy to commit money laundering, conspiracy to traffic fraudulent identity documents, and conspiracy to commit computer hacking.
The crypto community generally believes that Ross Ulbricht should not be condemned to die in prison for creating an anonymous e-commerce website. What is hopeful is that Democratic candidate Robert F. Kennedy Jr. has pledged to consider the case if elected, Republican candidate Vivek Ramaswamy has taken photos with fans wearing "Free Ross" t-shirt, and Trump has considered the pardon in the past. As long as the public perception of Bitcoin continues to grow, there is hope for Ross.
For those interested, visit Freeross.org.
SBF’s Trial Begins Tomorrow
It's still mind-boggling to think that just a year ago, the entire crypto community held the belief that Sam Bankman-Fried was one of the advocates for preserving the integrity of the space and tomorrow marks the beginning of the jury selection process in his case. Speculators often suggest that the resumption of a bull market hinges on the prosecution of wrongdoers, and while this notion is enticing, it lacks substance and is superstitious. While justice being served would bring relief, it's important to remember that we, the people who are here, laying the groundwork is essential for a bull market to ensue.
The 3 Key Factors That Will Bring 1 Billion People To Crypto | Mo Shaikh, Aptos Labs
It has been almost a year since my first convo with Mo Shaikh, the founder of Aptos. Many things have changed and it’s great to hear how his project is thriving. Listen to learn about Aptos, and about how crypto will get its first bullion users!
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.