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I'm thrilled to share some exciting news with you! TAP has officially become the latest sponsor of the Wolf Den Newsletter. If you've been keeping up, you may have noticed that I've organically featured TAP several times in the news segment because of their regulatory approval in the US, which then led to some conversations and connections and, ultimately, this sponsorship opportunity. What makes this even more exciting is that TAP is already a fan of the Wolf Pack, so all that remains is for me to introduce all of you to the platform.
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In the days ahead, I'll delve into more details, so for now, just stay tuned and make sure TAP is on your radar. Give them a follow, and when you do, let them know Wolf sent you. Let's collectively raise a big howl of appreciation back to TAP for supporting and keeping this newsletter free.
In This Issue:
Did Everyone Forget?
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
Bitcoin Trading Expert: Life-Changing Advice New Crypto Investors Need to Hear
This Is Why We Need ETFs
Bitcoin Mints Millionaires
A Letter From A Former Bitcoin Maxi
Bitcoin Makes Billionaires And Twitter Breaks Them l Ben Mezrich
Did Everyone Forget?
If you are new here, welcome. The Solana community is jizzing their pants, Bitcoiners are mocking Ethereum, Ethereum investors are at risk for a FOMO-induced aneurysm, and the shared mind of crypto investors looks like an 88-year-old’s brain scan with crippling amnesia.
The first step to regaining balance is to understand that market bottoms aren't as tidy and predictable as we might hope. Many in the crypto community seem to forget that the concept of a 'bottom' in this field is more elusive than concrete. Yes, there is a lowest point in terms of market cap, but it's not as clear-cut as we'd like to believe.
A quick refresher – and you probably knew this but let’s jog your memory:
Bitcoin's lowest point was around $15,787 in November 2022.
Ethereum hit its lowest at about $890 in June 2022.
Solana's bottom came in December 2022, around $8.2.
XRP's bottom was way back in March 2020, close to $0.14 – and no, that's not a typo.
Remember, it's critical to acknowledge that no two assets in any market bottom out at the same time. This seems obvious, yet crypto investors often fall into the trap of comparing different assets as if they're in a head-to-head race. This behavior has been particularly rampant in recent weeks.
Take the Solana vs. Ethereum narrative as a prime example.
In 2022, Ethereum hit its low about six months before Solana. In early 2023, Ethereum began its recovery, breaking free from its bearish slump between January and April. On the other hand, Solana started gaining traction later in the year, shaking off its downtrend around September – a good six to eight months after Ethereum began its recovery.
Yet, despite this timeline, the crypto community is fixated on comparing Solana and Ethereum, overlooking Ethereum’s earlier rally this year.
I can almost hear the staunch crypto purists arguing, ‘How can you ignore Solana's surge while Ethereum remains quiet?’ My response? A chuckle.
Let's be clear: Comparing two distinct assets is like trying to make sense of things with a single functioning brain cell. It’s a desperate attempt to rationalize one's investment decisions.
In an ideal world, Bitcoin would bottom out first, then Ethereum, followed by all altcoins, each in turn. Then, Bitcoin would lead the charge upward, with Ethereum and the altcoins in tow, ending in a big, happy crypto family reunion...
But let’s get real.
In theory, this sequence makes sense, but the actual journey to the top is far more complex, filled with intense emotions and forgotten lessons.
I hope this introduction helps you stay level-headed, regardless of your holdings. I'm rooting for Solana, optimistic about Ethereum, and confident in Bitcoin.
Just give the market some time – it will eventually reward your patience. Forgetting the past is a surefire way to stumble in moving forward.
Bitcoin Thoughts And Analysis
Bitcoin just had another monster weekly close, but right into the most important resistance on the chart. As I said last week, this is a reasonable area for many to take profit, since it is the key level where the market broke down last year on LUNA news. This area could be a tough nut to crack.
I am proceeding with caution here.
As you can see, Bitcoin is showing more bearish divergence with overbought RSI, directly into key resistance from the LUNA collapse. This is a reasonable time to sit on your hands and wait to see what happens. At this point, I would either look for a meaningful retracement to buy, or a break through resistance above. We are in a bit of a no man's land below key resistance.
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 can see a ton of bullish altcoin charts right now, but most have already left the station or are hitting the targets that I shared before. I will revisit when I have a bit more time later today and see if we can find some fresh narratives. For now, many look a bit overextended and potentially due for a pullback. We have had some incredible gains here over the past few weeks, maybe a decent time to close a part of those positions, take some profit and run with the house’s money. I am NOT saying it is over, but always a good idea to take some off the table.
Legacy Markets
European stocks experienced a rise on Monday, influenced by anticipation of upcoming inflation data from the US and UK, which may indicate a peak in interest rates. The Stoxx 600 index saw a 0.7% increase, partly driven by gains on Wall Street and strong performance in the health sector, highlighted by Novo Nordisk's surge after positive results from a Wegovy trial.
Asian markets also saw gains, led by Taiwan Semiconductor Manufacturing Co., hinting at a recovery in the global chip market. However, US S&P 500 and Nasdaq 100 futures slightly dipped.
Investors are closely watching US consumer price data, expected to show a decline in inflation, and UK data, which is also predicted to indicate slowing price growth. This has led to a decrease in Treasury yields.
Economists are divided on the timeline and extent of potential Fed interest rate cuts, with Morgan Stanley and Goldman Sachs offering differing forecasts.
In international relations, a forthcoming Biden-Xi summit and potential easing of US-China tensions, including possible Boeing purchases by China, are key focal points.
Meanwhile, the yen weakened to a new low for 2023, sparking concerns about possible intervention, and oil prices continued to fall. Bitcoin's value hovered near a high not seen in 18 months.
Events coming up this week:
ECB Vice President Luis de Guindos speaks, Monday
US CPI, Tuesday
UK jobless claims, Tuesday
Chicago Fed President Austan Goolsbee speaks, Tuesday
China retail sales, Wednesday
UK CPI, Wednesday
US retail sales, PPI, Wednesday
China new home prices, Thursday
US initial jobless claims, Thursday
New York Fed President John Williams, Thursday
US housing starts, Friday
ECB President Christine Lagarde speaks, Friday
Chicago Fed President Austan Goolsbee, Boston Fed President Susan Collins, San Francisco Fed President Mary Daly all speak, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.8% as of 9:20 a.m. London time
S&P 500 futures fell 0.2%
Nasdaq 100 futures fell 0.3%
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index rose 0.3%
The MSCI Emerging Markets Index rose 0.5%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0691
The Japanese yen fell 0.2% to 151.78 per dollar
The offshore yuan rose 0.1% to 7.2990 per dollar
The British pound rose 0.2% to $1.2246
Cryptocurrencies
Bitcoin fell 0.5% to $37,004.8
Ether fell 0.3% to $2,054.31
Bonds
The yield on 10-year Treasuries was little changed at 4.65%
Germany’s 10-year yield advanced one basis point to 2.73%
Britain’s 10-year yield was little changed at 4.34%
Commodities
Brent crude was little changed
Spot gold fell 0.2% to $1,936.33 an ounce
Bitcoin Trading Expert: Life-Changing Advice New Crypto Investors Need to Hear
I had the privilege of being hosted on the Altcoin Daily podcast, where we had an epic interview featuring some tough, thought-provoking questions. I was asked where Ethereum is headed this cycle, my thoughts on Solana vs Cardano, my top altcoins, and about advice for traders this cycle. It was nice to be on the other side of questions for once and if you want to watch, you can do so HERE.
This Is Why We Need ETFs
The trading structure of Grayscale's trusts is subpar compared to ETFs. You might be aware of the staggering premiums at which Grayscale's trusts, such as GSOL for Solana, are trading. However, this phenomenon is not exclusive to Grayscale’s Solana; it's also occurring with Chainlink (GLINK), Filecoin (FILG), and Decentraland (MANA). The premiums for these trusts, starting with Solana, are 869%, 250%, 901%, and 308%, respectively.
It would be imprudent to attribute these premiums solely to institutional buyers; rather, they stem from inefficiencies in how Grayscale is compelled to manage its products. Astute retail traders recognize that these premiums are a consequence of spot market dynamics, prompting them to flock to Grayscale's products. While it's anticipated that these premiums will eventually decrease, trading them is far from an 'easy game.' Many latecomers may find themselves burned by these products, whereas they might have been safer in the spot market.
Bitcoin Mints Millionaires
Did you know that MicroStrategy makes a million dollars every time Bitcoin goes up by $6.31? Insane. For us regular people, Bitcoin is in fact doing a great job of turning long-term investors into millionaires. “Specifically, as of November 12, the number of Bitcoin millionaires stood at 88,628, signifying a substantial increase of 60,544 from the 28,084 millionaires reported on January 5, according to data retrieved by Finbold.” This surge marks a three-fold increase for 2023 up from 28,084 millionaires in January.
A Letter From A Former Bitcoin Maxi
I saw this letter on Twitter, written by Udi Wertheimer, and had to share it here. It fits the theme of the intro and has a lot of wisdom to unpack, but is too long to copy in its entirety. The highlights are below:
Sorry, ETH podcasters. You’re the new laser-eyes. You’re the maxis now! You got cocky, you took your eyes off the ball, you got old, slow, too pretentious, too preachy, you promised scale and shards but no one cares about your empty promises anymore.
It’s over. Or is it? No. It’s not. ETH can recover but you will have to EARN IT.
Step 1: admit that you have a problem.
It is tempting to think that the market owes you something here. You were early to ETH! You took the risk! When they all laughed at you! You built this town! And you waited, oh, how much you waited.
Step 2: news flash - everyone else is not just like you
It is easy to assume that the marginal new crypto user will be a carbon copy of yourself.
They will not. They are not. Their values, motivations, dreams.. they will be different than yours.
If they were just like you, they might’ve joined crypto when you did! But they didn’t, because what got you started with crypto didn’t appeal to them.
Step 5: go all-in
Once you found your usecase X, the one that ethereum is best for, double down on it.
This is where being an ETH (ex-)maxi for years actually pays off. You have the domain knowledge, you have the technical chops, you have the capital and social capital, so seize the moment and the opportunity and go deliver X to the world. On ETH.
Bitcoin Makes Billionaires And Twitter Breaks Them l Ben Mezrich
Legendary author Ben Mezrich joins Scott Melker to discuss the early days of Bitcoin and the current days of Twitter.
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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.