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In This Issue:
42K All Day
Bitcoin Thoughts And Analysis
Altcoin Charts
Stock And Bonds Down Slightly - Bitcoin Back In Mainstream Headlines
GOLD Makes New All Time High - And Loses It Fast
The Highest Of Stakes
Vitalik Butterin On Techno-Optimism
Rat Poison Squared Pulls Ahead
SEC Gets Annihilated By Judge - Again
Yat Siu Made Me SO BULLISH On Web3 And The Metaverse
42K All Day
42K.
If you follow me on Twitter (X), you know that I tweet every time Bitcoin hits a key level. Today I had the honor of tweeting “42K all day.”
Bitcoin finally broke above the key area of resistance, the level from which the asset dropped when LUNA collapsed. Bitcoin has spent as much time trading around $42,000 as almost any other level. This is where the pump ended after Tesla bought Bitcoin. It has acted as resistance and support countless times.
Hello, my old friend. It is good to see you again. Welcome home.
This brings us to the natural proclivity towards making huge predictions when things start to move in a positive direction.
Whenever I hear someone mention phrases like 'we are in the second inning' or 'the bull market peaks in Q3 2025,' a small part of me dies. While I recognize that such predictions are often made in good fun, crypto has repeatedly shown that attempting to foresee the future is punishing and impossible.
How many of the so-called 'influencers' who confidently throw out predictions successfully called the market bottom in advance? Perhaps one, maybe two? This fact alone speaks volumes, highlighting that those currently making bold predictions about the top may not boast the most reliable track record.
Making predictions is fun, I’m not judging them for trying. This is simply a reflection of reality. How many analysts, whether they focus on fundamentals or technical analysis, foresaw Bitcoin passing $40,000 before the end of the year?
The nature of markets defies predictability.
Now that my rant is behind us, let's shift to a positive outlook and focus on our current position, grounded in concrete data. Let’s begin with asset prices, their all-time highs (ATH), and the percentage of completion toward those ATHs. Keep in mind these numbers fluctuate quickly, so these are rough figures.
Bitcoin - current price $41,389 - all-time high $68,789 - percent complete 60.2%
Ethereum - current price $2,243 - all-time high $4,891 - percent complete 45.6%
BNB - current price $229 - all-time high $686 - percent complete 33.4%
Solana - current price $64.81 - all-time high $260 - percent complete 24.9%
XRP - current price $0.63 - all-time high $3.84 - percent complete 16.4%
Doge - current price $0.09 - all-time high $0.74 - percent complete 12.16%
I won't delve deeply into possible conclusions drawn from these percentages, but it's reasonable to infer that there's considerable potential for further growth. To be candid, the likelihood of assets returning to their all-time highs varies, with some more probable than others. However, the numbers indicate there is still ample room for expansion.
Setting aside the numerical analysis, let's explore what 2024 might (or might not) have in store for us, which may (or may not) positively influence prices. Only time will reveal the true impact of these factors.
My crystal ball currently has a smudge on it, but I can see that it is trying to say something, which I’ll share here briefly.
The ETF - This is the most extensively discussed and obviously beneficial variable that should transpire in 2024. While a sell-the-news event could happen along with unforeseeable hurdles for the ETH ETF, I can't envision a more promising long-term catalyst for the market.
The Presidential Election - This could go one of two ways, yet there appears to be an increasing likelihood that the next U.S. President will be pro-crypto. At the very least, major candidates are engaging in active discussions on how crypto aligns with their agendas, prompting others to address the topic as well. As a bonus, markets historically rise in election years.
The Halving - On April 17, 2024, Bitcoin's reward will decrease from 6.25 BTC per block to 3.125 BTC. In response to this reduction, miners are vigorously competing for dominance on the network, thereby enhancing its security. Moreover, the combination of a reduced supply and sustained demand is anticipated to drive higher prices.
Rate Cuts - Investors are eagerly anticipating rate cuts, expecting positive effects on the market. As businesses and consumers are likely to seek loans for investments and purchases, this could lead to a potential increase in stock prices, further depreciation of fiat currency, and greater affordability of mortgages. However, it's important to note that the possibility of a recession still exists… and the rate cuts often come BEFORE the market crashes
Countries Adopt Bitcoin - When El Salvador adopted Bitcoin, the consensus was that many countries would follow suit. Although this expectation hasn't materialized, there's still reason to believe that more countries may explore or consider adopting a Bitcoin standard. Such a shift would have profound effects, setting the stage for a new set of crypto narratives.
Other - A few other positive developments for 2024 include NFTs rebounding in popularity, legal actions against bad actors resolving, contagion withering, mining operations expanding, and Coinbase reclaiming profitability. The shifting public perception of crypto is slowly turning around, which will once again enable retail to return in all their glory.
Crypto investors need to focus on 2024. Predictions, such as, ‘we are in the second inning’ or ‘the bull market peaks in Q3 2025’ are fun, but they don't provide tangible alpha for investors. What matters is understanding the narratives that will drive this market, which assets will benefit, and strategically positioning investments in the current landscape.
Regardless of what the market throws at us, some assets are going to remain resilient. Though my crystal ball may need cleaning, a discernible *up* can be seen through the blur, which is enough for me to understand that, with patience and a day-by-day approach, positive outcomes will follow. On that note, let's conclude 2023 on a strong note and make the most of December.
Bitcoin Thoughts And Analysis
As mentioned above, $42K is historically one of the most important levels for Bitcoin. It was the dead top of the "Tesla" pump in January of 2021, and acted as both support and resistance countless times after.
Price tapped this key level within a few dollars and quickly retreated - but not by too much. This is now the level to watch, even at the weekly close in 6 days.
I have charted all of the key weekly levels that I will be watching into the future, both support and resistance. This is the best guide we have for where Bitcoin is likely headed if it continues up or retraces.
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.
Rather than share a bunch of setups as the entire market heats up, I will chart the key large time frame levels of popular coins over the coming days. We can use these moving forward as reference for where support and resistance are likely to be found.
These are the key levels of support and resistance for ADA on the weekly chart.
These are the key levels of support and resistance for DOGE on the weekly chart.
These are the key levels of support and resistance for Ethereum on the weekly chart.
Stock And Bonds Down Slightly - Bitcoin Back In Mainstream Headlines
Stocks and bonds experienced a pullback as traders reassessed the likelihood of interest rate cuts following November's significant market rally. Bitcoin witnessed a notable surge, surpassing $41,000, its highest since April 2022, while gold briefly reached an all-time high.
The 10-year Treasury yield increased by five basis points to 4.25%, and U.S. futures showed modest declines. This market movement comes amidst anticipations of upcoming economic reports that will provide insights into the U.S. labor market's condition and the potential for Federal Reserve rate cuts. JPMorgan Chase strategists, led by Mislav Matejka, have expressed concerns about the market's vulnerability to a more substantial economic contraction, considering the fragile nature of soft-landing hopes.
Mauro Valle of Generali Investments Partners suggests that it's improbable to see a further decrease in yields towards the year's end. The S&P 500 index had a significant rally of about 9% in November, driven by optimism around a peak in interest rates, but this has left the index in an overbought state, which typically precedes a sell-off.
Federal Reserve Chair Jerome Powell recently tempered expectations for rate cuts in early 2024. The market is now looking ahead to several key reports, including the JOLTS data for October, the ADP National Employment Report, and non-farm payrolls, to gauge future monetary policy directions.
Barclays Plc strategists caution that further reductions in inflation might become more challenging, citing persistent demand and labor market dynamics in the U.S.
In individual stock news, Spotify Technology SA's shares rose after announcing further job cuts, and Roche Holding AG gained following its agreement to purchase Carmot Therapeutics Inc. Meanwhile, gold peaked over $2,130 an ounce before retracting, and Bitcoin continued its upward trajectory, reaching levels not seen since April 2022.
Key events this week:
Riskbank November meeting minutes released, Monday
US factory orders, durable goods, Monday
Reserve Bank of Australia rate decision, Tuesday
Japan’s Tokyo CPI, Tuesday
China Caixin services PMI, Tuesday
South Korea CPI, GDP, Tuesday
Eurozone PMIs, Tuesday
Australia GDP, Wednesday
Eurozone retail sales, Wednesday
Bank of Canada rate decision, Wednesday
China trade, FX reserves, Thursday
Eurozone GDP, Thursday
Germany industrial production, Thursday
US wholesale inventories, initial jobless claims, Thursday
Japan household spending, GDP, Friday
US non-farm payrolls, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.3% as of 5:40 a.m. New York time
Nasdaq 100 futures fell 0.4%
Futures on the Dow Jones Industrial Average fell 0.2%
The Stoxx Europe 600 was little changed
The MSCI World index was little changed
Currencies
The Bloomberg Dollar Spot Index rose 0.1%
The euro fell 0.2% to $1.0867
The British pound fell 0.3% to $1.2669
The Japanese yen rose 0.2% to 146.49 per dollar
Cryptocurrencies
Bitcoin rose 5.4% to $41,890.5
Ether rose 3.5% to $2,260.24
Bonds
The yield on 10-year Treasuries advanced five basis points to 4.25%
Germany’s 10-year yield was little changed at 2.37%
Britain’s 10-year yield advanced three basis points to 4.17%
Commodities
West Texas Intermediate crude fell 0.4% to $73.74 a barrel
Spot gold fell 0.2% to $2,068.25 an ounce
GOLD Makes New All Time High - And Loses It Fast
Gold made an all time high, an astounding accomplishment for one of the world's oldest assets. It briefly broke above $2081, hitting a high of $2146. It was immediately smacked back down, not only below the all time high, but back into the trading range below $2075.
Gold bulls do NOT want to see another sweep of the highs with a long wick. They want to see continuation and a weekly close above the previous all time high.
Many analysts believe that gold is heading quickly to $3000 if it can hold above the highs... and that this would be the harbinger of bad economic times.
Vitalik Butterin On Techno-Optimism
I highly recommend checking out this blog on techno-optimism if you have the time. It offers an insightful perspective from Vitalik, delving into optimistic thoughts on various potential trajectories in the evolution of technology. While acknowledging the associated dangers, Vitalik explores multiple paths forward. The blog touches upon surviving AI, prediction markets, biological risks, weapons of mass destruction, and more. Although not heavily focused on crypto, it provides a fascinating glimpse into the broader mind behind Ethereum.
“We need to build, and accelerate. But there is a very real question that needs to be asked: what is the thing that we are accelerating towards? The 21st century may well be the pivotal century for humanity, the century in which our fate for millennia to come gets decided. Do we fall into one of a number of traps from which we cannot escape, or do we find a way toward a future where we retain our freedom and agency? These are challenging problems. But I look forward to watching and participating in our species' grand collective effort to find the answers.”
The Highest Of Stakes
I haven't watched this documentary yet, but I've heard it's recommended, even by people within the crypto community. If you're interested, you can find it on YouTube, Prime, Apple TV, Google Play, and a few other platforms.
Rat Poison Squared Pulls Ahead
Bitcoin, once dubbed “rat poison squared” by Warren Buffett, has now surpassed the market capitalization of Warren Buffett's Berkshire Hathaway. Do you think there will there ever be a point in which Berkshire Hathaway turns pro-crypto? What a day that would be.
SEC Gets Annihilated By Judge - Again
U.S. Judge Warns SEC Over 'False and Misleading' Request in Crypto Case
A U.S. District Judge, Robert Shelby, has warned the Securities and Exchange Commission (SEC) attorneys that they may face sanctions for allegedly presenting misleading information in a case involving the crypto firm Debt Box. The SEC had successfully convinced a court to freeze Debt Box's assets by arguing that the firm was attempting to transfer its assets and investors' funds overseas. However, Judge Shelby noted that these claims were false and misleading, leading to a temporary restraining order against Debt Box which caused the firm "irreparable harm."
Sanctions, typically monetary fines, are imposed for false statements or violations of court procedures. Initially, in August, Debt Box faced a restraining order restricting access to its assets. This order was dissolved after Debt Box proved it had not moved funds outside the U.S. or closed its bank accounts before the hearing on the SEC's request.
The SEC had sued Debt Box in July, accusing the company of selling unregistered securities known as “node licenses” since 2021. The SEC claimed that Debt Box misled investors, saying these licenses would mine cryptocurrencies that would rise in value, whereas they were actually creating the crypto using computer code.
Judge Shelby has now asked the SEC's attorneys to respond to his observations about their misleading arguments, giving them two weeks to reply to the inquiry.
Yat Siu Made Me SO BULLISH On Web3 And The Metaverse
There was no bear market for Yat Siu, Chairman of Animoca Games - there was simply a time to continue building and investing. If this podcast does not make you bullish, then nothing will!
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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.