The Wolf Den #872 - The Birds And The Bees

Flowers, trees.

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In This Issue:

1. The Birds And The Bees

2. Bitcoin Thoughts And Analysis

3. Altcoin Charts

4. Legacy Markets

5. Heed This Advice

6. This Is The Way

7. Japan Ends Draconian Crypto Tax Law

8. Solana: Time To Sell? Mike Alfred

The Birds And The Bees

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In every young person’s life, there comes a time for the pivotal 'birds and the bees' conversation—a hallmark of approaching maturity. Adolescents might enter this dialogue with a patchwork of knowledge, only to discover there's much they don't understand. These discussions, often fraught with discomfort, are essential stepping stones towards adult life.

In parallel, the current stage of the cryptocurrency cycle calls for a similar educational moment for investors.

In the past couple of months, there has been a Cambrian explosion of tempting altcoins for investors to choose from. Layer ones, twos, sevens, frog coins, dog coins, your mom’s knockers coin, and everything in between. We have once again reached the point in which opening up Twitter is like a kid going to Hooters for the first time.

Their eyes are lighting up.

Let’s be honest, nobody actually prefers Hooter’s wings.

Investors must be astute enough to understand that behind the enticing veneer of potential 100-fold returns lie numerous pitfalls and failures. The investment journey is not as simple as the proverbial search for a needle in a haystack, nor is it as glamorous as some social media portrayals suggest. Online spaces are rife with influencers who tout their rare victories while conveniently glossing over their multitude of losses.

Social media narratives tend to disproportionately amplify success stories, creating a skewed perception that investing is a series of unbridled triumphs. This creates a mirage of success, contributing to unrealistic expectations and a dearth of transparency within the investment community.

Confronting the failures that inevitably occur in this volatile market is not straightforward. These setbacks can't be trivialized as mere 'learning moments.' They are often jarring events that can wipe out entire positions, leaving investors with a bitter taste of reality instead of constructive lessons. Beyond the personal financial hit, the collateral damage often includes a tarnished reputation, which can deteriorate faster than any market downturn.

In the era of social media, it’s alarmingly simple to sweep failures 'under the rug,' ignoring the harsh consequences that come with them. An empty wallet, once brimming with promise, is a difficult reality to accept; yet, it is an integral part of the market's maturation process. This cautionary tale is not to suggest that investors surround themselves in proverbial bubble wrap but to advocate for a vigilant, sober approach to navigating the market's waters. It’s worth noting that savvy investors with significant holdings seldom tie their fortunes to questionable altcoins; the dynamics of prudent investing just don't align with such risky gambles.

May this discourse serve as a guide and a word of caution. Share it with peers or loved ones who might benefit from this advice. The crypto market still offers plenty of legitimate excitement without the need to yield to the siren song of high-risk ventures.

Bitcoin Thoughts And Analysis

Bitcoin is doing nothing at the moment, enjoy the calm and focus on altcoins. The ETF decision is coming soon!

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.

EGLD/USDT

If you have been following along, you have seen me share EGLD entries at roughly $23 and $38 in this cycle. That is, of course, after this was the biggest newsletter trade ever shared when this coin was 10 sats vs. Bitcoin as ERD. We have traded this for many 100xs on multiple occasions.

I am not sure that same opportunity exists now, but we do have EGLD breaking and retesting a key weekly level right now. If it holds, the next resistance is almost 2x away. $69 --> $127.

Legacy Markets

• European Stocks Near Two-Year High; Bonds Stall: Markets Wrap

European stocks are nearing their highest levels in two years, while U.S. equity futures have seen modest gains amidst investor anticipation of Federal Reserve interest rate cuts in the coming year. Gold remains near its record high from earlier in the month.

The Stoxx Europe 600 index remains relatively unchanged in light holiday trading but is set to close the year with an approximate 13% gain. Despite early advances, crude oil prices have dipped, causing oil majors to decline. On the other hand, Nasdaq 100 and S&P 500 futures have seen slight movements following Wall Street's previous day's gains.

The bond market experienced a dip after a significant rally, with yields on Treasuries and Germany's bonds reaching new lows. This movement places the global bond market near its best two-month rally in history.

In Asia, Chinese stocks are leading with substantial gains, driven by investors moving into some of 2023's underperforming sectors. Global equities are heading towards their highest close since February 2022, fueled by optimism for rate cuts next year.

Traders are betting on the Fed reducing rates as early as March, awaiting further economic indicators from upcoming jobs data. The bond gains were supported by strong demand for Treasury notes, indicating a desire to secure yields before potential rate cuts by the Fed. Concurrently, the dollar has weakened against its major counterparts for the fifth consecutive day.

In Japan, the yen strengthened for a second day as the Bank of Japan Governor laid the groundwork for the country's potential first interest rate increase since 2007.

The CSI 300 Index in China is on track for its first weekly gain since November, with tech and renewable energy sectors pushing the rally. Meanwhile, oil prices have retreated due to signs of increasing U.S. stockpiles, and Bitcoin has seen a slight increase, trading above $43,000 amid ongoing ETF approval speculation by the SEC.

Key events this week:

• US wholesale inventories, initial jobless claims, Thursday

• UK Nationwide house prices, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 was unchanged as of 9:20 a.m. London time

• S&P 500 futures were little changed

• Nasdaq 100 futures rose 0.2%

• Futures on the Dow Jones Industrial Average fell 0.1%

• The MSCI Asia Pacific Index rose 1.2%

• The MSCI Emerging Markets Index rose 1.2%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%

• The euro rose 0.1% to $1.1117

• The Japanese yen rose 0.6% to 140.93 per dollar

• The offshore yuan rose 0.5% to 7.1166 per dollar

• The British pound was little changed at $1.2794

Cryptocurrencies

• Bitcoin fell 0.9% to $42,995.95

• Ether rose 1.2% to $2,388.21

Bonds

• The yield on 10-year Treasuries advanced three basis points to 3.82%

• Germany’s 10-year yield advanced three basis points to 1.92%

• Britain’s 10-year yield advanced four basis points to 3.48%

Commodities

• Brent crude fell 0.9% to $78.95 a barrel

• Spot gold fell 0.2% to $2,073.51 an ounce

Heed This Advice

• Taken From Twitter User Pentoshi

I'm going to tell you guys something useful. Few of you will actually take the advice

I've woken up and traded in this market nearly every day, for 2,500+ days straight. I have seen or felt every emotion, have seen the same narratives, the same charts play out 1000+ times, the same psychology over and over. And for the most part, have a pretty damn good hit rate as a result. Things you can only get with time in the market.

If you make life changing money. Take it out of the market. Many of you will make life changing money, but few will keep it. You likely aren't a genius, but in favorable conditions. Otherwise, it's a regret many of you will live with for a long time. You're greed, and needing more will be your downfall. You can take it out, and keep a lot in still and do fine with that

A lot of you will of course make a lot, bc conditions are easy. But what you will fail to realize is for the most part. There are many experienced traders here that have traded multiple cycles. There are people with more information than you have, better systems, better execution, better everything, access to resources you don't. And over time, your money will eventually start ending up in those pockets until you are left with very little towards the end of the cycle. One day the music stops, and you won't have a chair. If you leave all your money on the table, it likely is only temporarily yours.

This has nothing to do with where we are in the cycle, and is not a bear post. It is a post on what to do when you hit life changing money. Secure it, then start over with just a bit less. And just to reflect on where you are

This Is The Way

• Click HERE To View The Tweet

Dismissing the 'Buy the rumor, sell the news' mantra, Michael Saylor and his company remain undeterred in their aggressive Bitcoin acquisition approach. Whether Bitcoin dipped to $20,000 or surged to $60,000, MicroStrategy would likely still be in the headlines today. In the latest move, Saylor purchased a substantial 14,620 BTC for around $615.7 million at a per-Bitcoin price of $42,110. 

This acquisition, adding to MicroStrategy's impressive stash, now valued at $5.9 billion, showcases Saylor's steadfast commitment to buying. Think about this size for a second. $615.7 million, unbelievable. Even now that we are in a definitive bull cycle, there's no indication that Saylor plans to slow down. The fascinating dynamic is that MicroStrategy's success, reflected in $MSTR, correlates with increased Bitcoin purchases—a trend I expect to persist post-ETF approval.

Japan Ends Draconian Crypto Tax Law

• Japan's Cabinet Proposes Scrapping Corporate Tax on Unrealized Crypto Gains

This news is a few days old, but its significance warrants inclusion. Japan has been levying taxes on unrealized gains from crypto assets held by corporations. Fortunately, this ridiculous law has been overturned, scheduled to take effect on April 1, 2024, coinciding with the start of Japan's fiscal year. Under the revised policy, corporations will only be taxed when they sell their crypto assets, aligning with the standard practice in most regions. While the ultimate approval is pending a Diet session (Japan’s legislator), there is optimism that this change will pave the way for a more crypto-friendly landscape in the country.

Solana: Time To Sell? l Mike Alfred

Join Mike Alfred and Chris Inks as we are discussing what's going to happen with Solana and other cryptos.

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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.