The Wolf Den #847 - Break This Habit Now
Stop fantasizing about future gains.
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In This Issue:
Break This Habit Now
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
All Cohorts Are Buying
Could Circle IPO?
Ordinals Are Back
ETF To Be Approved During This Window?
This Is The BIGGEST THREAT To Crypto! l Here's How We Stop It!
Break This Habit Now
At some point, every single one of us has been guilty of thinking too far ahead for the wrong reasons. Have you heard the saying, ‘don’t count your chickens before they hatch?’ The equivalent of this wisdom in markets is the recognition that there's a very strong tendency for optimism to lead us into premature celebration and planning.
The mistake looks something like this.
If Bitcoin hits $250,000, I can make the down payment on my dream home.
If Ethereum hits $10,000, I can pay off my student debt.
One more profitable leveraged long and my kids can go to college.
One good month of trading and I can go on vacation.
Your version might be slightly different, but all these statements essentially tell the same story. The rationale for this train of thought starts in an honest place. We do proper due diligence, build conviction, develop a thesis, make a prediction, and then act when every bone in our body is telling us otherwise. As the profits roll in and our hard work begins to pay off, these intrusive thoughts become really hard to ignore.
It’s human nature. We want the best for ourselves and others and are naturally hopeful. But hope is not an investing strategy. What's dangerous about this trap is how easy it is to fall into. After patiently waiting an entire bear cycle, for some of us multiple bear cycles, while working hard to derive a thesis or prediction, our brains naturally want to reward us. Even worse is if the original idea looks and sounds good, but still isn’t working, which leads desperate investors to find a way to justify their decisions and be “right,” staying in a bad investment long past their planned exit.
I have written on this topic in the past, but now it is more relevant than ever as the market begins to turn around and the light at the end of the tunnel is finally visible. The next time you fall into this trap, I challenge you to replace the above statements with one of the positive affirmations below.
If I continue to carefully and patiently invest, markets will reward me because they trend up.
If I continue to educate myself on Bitcoin, I will become comfortable with volatility.
If I teach myself how to interact with DeFi, I can be a hands-on investor.
If I expand my time horizon, I increase my odds of long-term success.
One good month of harder studying and I can sharpen my trading skills.
Win or lose on this trade, I will learn from what went right and wrong.
The sooner we begin to think positively about the process and not the results, the easier crypto investing and trading becomes. Longer time frames breed success, but can't just be adopted without putting in the work to truly believe in them. Having this mindset helps reset your thinking to square one, reminding you why you are here in the first place. Rather than wandering into a fantasy land of what could be, you will find yourself revisiting your old thesis, sharpening your skills, questioning your biases, and formulating better ideas. Hopes and dreams are removed from the picture, alongside boats, cars, and lavish vacations.
That’s not why you are here. Our mission is more important to us than that, personally and collectively.
Assume better habits and focus on what’s important, and you will find far more success as an investor.
Bitcoin Thoughts And Analysis
Bitcoin is rapidly approaching the "final boss" resistance zone on the daily chart. You can see that a huge leg of the down trend started there and you may recall that the low $40ks was considered the final key support that broke on the way down.
As you know, we had bearish divergence with overbought RSI, before hidden bullish divergence printed and we pushed back up. That canceled the bearish divergence, so now we watch and see if we get another one.
Bitcoin continues to make new yearly highs and seems content to keep pushing up without giving desperate dip buyers the opportunity to get on the train. Classic bull market Bitcoin.
When Bitcoin goes full bull, it rarely gives sidelined traders a chance to buy a pull back… and tends to smash through “bearish” ascending channels and wedges to the upside.
Spoiler. It’s not bearish. It’s higher highs and lows.
Altcoin Charts
For those who are new here, I share SETUPS and not SIGNALS. These are ideas that I am watching - if a certain thing happens, then the trade triggers. I am not telling you what to buy or when. I am showing you how I am watching certain charts and what has to happen for me to take a trade.
I have no idea what this coin is, have seen it mentioned randomly on X. A few people have mentioned it of late, so I happened to take a look while scanning charts this morning. I have never traded it and am not sure I even can in the US.
As you can see, this coin, because it is relatively new, is approaching price discovery on OKX. On some other exchanges, it never reached $2.90 and is already testing all time highs.
But this chart has the most history. I am not really interested below that line, so this is one where I set an alarm and buy price discovery for new highs. My favorite trade when I get it is a break and retest of an all time high.
Legacy Markets
US stock futures show a modest rise, continuing the S&P 500's eight-day winning streak, which could be the longest since 2004 if gains hold. Disney shares increased by 4% pre-market after a profitable earnings report, while Arm Holdings fell 6% post-IPO due to a lackluster sales forecast. European markets are also doing well, notably Adyen NV in the Netherlands with a 32% share rise after revealing growth targets. The market sentiment appears to be that central banks, like the Federal Reserve, may halt interest rate hikes, despite cautionary statements from officials. Oil prices remain near a three-month low after a significant drop, and the 10-year Treasury yield has increased slightly to 4.52%. Bitcoin has surged to an 18-month high, signaling investor optimism. Central bank leaders, including Fed Chair Jerome Powell and ECB President Christine Lagarde, are due to speak, which markets are closely watching. Overall, there's a growing belief among traders that the intense cycle of global interest rate increases may be at an end.
Corporate Highlights:
AstraZeneca Plc clinched a deal to develop a drug from the pharma industry’s hottest class of medicines, agreeing to pay as much as $2 billion to gain an experimental pill for diabetes and obesity.
Wizz Air Holdings Plc lowered its profit outlook for fiscal 2024 as aircraft engine issues limit growth, and concerns grow about the impact of a slowing economy and rising geopolitical tensions.
Coinbase Global Inc. and other crypto companies rose, extending a recent rally on expectations that the SEC will approve exchange-traded funds that can invest in Bitcoin.
Flutter Entertainment Plc reported after third-quarter revenue that missed estimates. Analysts were disappointed that the FanDuel owner didn’t follow in the footsteps of peer DraftKings by raising guidance for its US business.
Key events this week:
US initial jobless claims, Thursday
Fed Chair Jerome Powell participates in panel on monetary policy challenges, Thursday
Atlanta Fed President Raphael Bostic and his Richmond counterpart Tom Barkin speak, Thursday
ECB President Christine Lagarde participates in fireside chat, Friday
US University of Michigan consumer sentiment, Friday
Dallas Fed President Lorie Logan and her Atlanta counterpart Raphael Bostic speak, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.6% as of 10:57 a.m. London time
S&P 500 futures rose 0.3%
Nasdaq 100 futures rose 0.2%
Futures on the Dow Jones Industrial Average rose 0.3%
The MSCI Asia Pacific Index rose 0.3%
The MSCI Emerging Markets Index fell 0.2%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro fell 0.2% to $1.0688
The Japanese yen was little changed at 151.11 per dollar
The offshore yuan fell 0.1% to 7.2953 per dollar
The British pound was little changed at $1.2276
Cryptocurrencies
Bitcoin rose 3.3% to $36,779.88
Ether rose 1.4% to $1,913
Bonds
The yield on 10-year Treasuries advanced three basis points to 4.53%
Germany’s 10-year yield advanced two basis points to 2.64%
Britain’s 10-year yield advanced two basis points to 4.26%
Commodities
Brent crude rose 0.7% to $80.27 a barrel
Spot gold fell 0.1% to $1,947.98 an ounce
All Cohorts Are Buying
Glassnode's "Accumulation Trend Score," monitoring the behavior of Bitcoin investors, currently indicates that all cohorts of Bitcoin investors are purchasing Bitcoin at similar levels. This metric tracks the 30-day changes in holders' balances and considers the entities' size when identifying accumulation and distribution behaviors. The reading of the chart is as follows: A value near 1 on the indicator suggests recent accumulation within the focused BTC group. Conversely, values near 0 indicate that distribution has been the prevailing trend among these holders. As you can see right now, the color is unanimously blue in all groups as Bitcoin broke through the high 20s to mid-30s.
Could Circle IPO?
Circle attempted to go public via a SPAC in 2022, but was derailed by the SEC due to the agency not signing off on the necessary requirements in time. At that time, Circle was estimated to be worth about $9 billion, whereas it was valued at $4.5 billion the year before when it initially announced its intentions to go public.
The current valuation of the firm is unknown, but given Circle’s substantial year-over-year growth and involvement in the treasury market, I wouldn't be surprised to see Circle announce a market cap close to Coinbase around $20 billion. While it isn't confirmed that Circle is in the late stage of planning to go public, it is confirmed that the company does intend to do so.
Circle going public would be a really big win for crypto credibility.
Ordinals Are Back
Have you attempted to send a Bitcoin transaction recently? The transaction fee is now at its highest in nearly six months due to a fresh wave of interest in Bitcoin ordinals, increasing competition for block space. GeniiData reports almost 1 million transactions in the past 7 days, resulting in the average cost of sending Bitcoin rising to around $7 from the previous $1 to $2 range. While I’m not an expert on transaction volumes, I interpret this as a sign that the bull market is back. However, I anticipate that during a true alt season, NFTs will likely represent the final surge, an aspect worth noting.
ETF To Be Approved During This Window?
Due to the SEC's timeline of delaying applications and the overlap in comment periods, we're currently within a window where the SEC could potentially approve all 12 applicants simultaneously. Prior to this window, any of the applicants could have been approved, but a simultaneous approval wouldn't have been feasible. If the SEC intends to act 'fairly,' the window from now until November 17 would be their opportunity to approve all filers or wait until early January. I anticipate the market will become increasingly restless if this window closes without approvals, and as January approaches, the tension will surely mount. It's going to be a tense period, no doubt about it.
This Is The BIGGEST THREAT To Crypto! l Here's How We Stop It!
The US government is the biggest threat to crypto, but there are people and coalitions working tirelessly on our behalf. Kevin Trommer from DCTA will tell us EXACTLY what we can do to protect ourselves.
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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.
Great advice in #1