View profile

The Wolf Den #196 - Institutions Are Not Perfect

Revue
 
 
March 11 · Issue #196 · View online
The Wolf Den Crypto Newsletter
Make sure to check out the NFT giveaway from my friends at Sovryn, the trading competition from Phemex and all of the amazing things they are doing at Nexo - all in today’s newsletter.
Institutions are not perfect.
The past couple of weeks have shown that not even major institutions can time a Bitcoin top or bottom. CEOs appear to be geniuses when they publicly announce their purchases and price skyrockets, but they are not immune to the corrective nature of Bitcoin. During the most recent Bitcoin corrections, MicroStrategy, Tesla, and Square all saw at least some of their trades in the red. Let’s take a closer look.
MicroStrategy owns the most Bitcoin of the corporate giants and has executed the most trades to accumulate their stack. By my count, Michael Saylor has publicly bought Bitcoin seven times. Four of the seven trades have gone negative at one point, with some sitting in the red for a couple of weeks and others for just a couple of days. Saylor has endless resources and advisors, yet he still timed the market “poorly” over half the time. Some argue that Saylor is a fool for continuing to buy Bitcoin near current prices because he could have just bought it all back in the $10,000 range. His conviction was equally strong when price was 20% of where it is now.
The above perspective is an incredibly foolish way to view trades and investments. Saylor was not trying to time the bottom, he was merely adding to his stack as his resources allowed. That’s a sound investing strategy - dollar cost averaging on a grand scale, even if he is forced to average up.
Square made its second Bitcoin purchase for an aggregate price of about $50,000 per coin. By the above logic, Jack Dorsey had worse market timing than Saylor. And Tesla saw a negative return for a short amount of time from the previous correction. Perhaps worse of all in the eyes of naysayers? Tesla’s late arrival to the game. Elon could have bought much sooner and for far less.
The excuses and terrible takes are endless, but given enough time, all three of these men and their companies will likely be viewed as geniuses by even their staunchest critics. As traders and investors, we are no different than the corporations above - we are merely operating on a smaller scale. Hindsight is 20/20 and we can all look back with regret for “not buying earlier” or for poorly timed purchases. Things change. Through time we may have access to more cash, similar to how MicroStrategy sold bonds to raise money, or our conviction may grow, similar to how Square doubled down on their position after Q4 interest affirmed their thesis on Bitcoin.
If you have accepted that the path to wealth is rocky on the way up, then do yourself a favor and acknowledge that it is equally unstable on the way down. Corporations, you, and I will all be tempted to question how and when we bought and sold our crypto, and look back with regret at the additional profit that we could have made had we done it differently. Don’t beat yourself up - we have the pleasure of watching the greats publicly buy-in, proving that they too are not perfect. They provide real-time proof that we are all just human.
If you do desire to get this email more often, you can join the paid version!
The paid version is only $15 a month and goes out every single weekday. It is just like the issue you are currently reading! Composing this newsletter is how I spend the majority of my time, and I take the fact that my members are paying me very seriously. I would love to have you become a more frequent part of this community.
If you cannot pay with a credit card, please respond to this email and we can get you setup with crypto. If you do want to pay with crypto, I can offer 7 months for the price of 6, or 14 months for the price of 12 for the inconvenience!
In This Issue:
  1. Institutions Are Not Perfect
  2. Bitcoin Thoughts And Analysis
  3. Altcoin Charts
  4. Legacy Markets
  5. Chart Requests
  6. FREE GIVEAWAY! Wolf Of All Streets X Sovryn 1 of 1 NFT
  7. Stablecoins Are A Major Reason To Be Bullish On Ethereum
  8. The Token Taxonomy Act Is Back
  9. NFTs Could Soon Be Used In Everyday Life
  10. The Wolf Of All Streets Podcast Ft. Robert Breedlove
  11. Nexo - Earn Yield, Get A Loan And Trade
  12. Phemex Trader’s Arena
  13. My Recommended Platforms And Tools

Bitcoin Thoughts And Analysis
Bitcoin continues to look strong, even with the small correction in the past hours. I have analyzed it exhaustively of late, so I will just share my views once again on the 4-hour chart, which seems to be a really clear time frame.
This is a beautiful chart. Clear break of the range below and retest as support before moving to the next resistance - $55,046. This was broken and retested as support on a few candles. The candle closing now dipped below and then closed above with a nice long down wick. That is a bullish candle. The resistance in supply above was predictable - it will take a lot of buying to push to new highs.
This looks like accumulation - a bit of an ugly inverse head and shoulders but it clearly rounded at the bottom and has retested the neckline of this pattern as support.
Finally, we have a clear hidden bullish divergence with RSI confirming. This is a nice signal of continuation after seeing RSI temporarily hit overbought. Nice to see if you are feeling bullish.
Altcoin Charts
I am still hesitant with alts at the moment, knowing that Bitcoin is at a key area. If it blasts up through resistance to new highs, alts will likely suffer against Bitcoin (they will probably rise some on USDT pairs, but not as much as Bitcoin). If it drops again, alts would also suffer. The best scenario for altcoins would likely be a nice long consolidation for Bitcoin, but I am not confident we will see that. I just scanned through Binance, and more than half the coins are red. So even though there are some good moves, most are still suffering today.
DAO/USDT
I charted this on DEXTools and cannot share the link, so the image above will have to do. This can be traded on Uniswap
Correct contract: 0x0f51bb10119727a7e5ea3538074fb341f56b09ad
After a really amazing launch and rise, DAO went into a corrective phase, dropping from the top. It appears accumulation is potentially coming to an end. You can see a nice rounding bottom that has formed, with key resistance levels marked. Price is currently attempting to flip the level at 4.4644 to support, which would be bullish. Ultimately, we want to see price trading above the swing high at 5.247 to confirm, but the general shape of the recovery and continued rise of price makes me confident that this is reversing.
Remember - there are NO STOP LOSSES ON UNISWAP, so size your position accordingly. I trade very small on these coins when I take positions, knowing that there’s always the chance that something could happen and it could drop fast. Nothing to do with this project specifically - just the only approach for managing risk on low cap DEX coins.
Legacy Markets
DXY (DOLLAR INDEX)
When in doubt, zoom out. Nothing has changed on the monthly chart for the DXY, after breaking down from the macro ascending channel that it was traveling in for a decade. It has found a bit of support in a predictable area of demand for the moment, but that does not mean it’s a reversal yet. Anything is possible, but for now this looks like just another consolidation. I will reassess if we see more strength.
Why does this matter? Because almost every other asset is inversely correlated to the dollar. When it drops, stocks, metals and even Bitcoin tend to rise.
Looking at the daily, the dollar was soundly rejected in the resistance area that I outlined a few days ago. Until it is above that area, a dollar reversal to the upside is not on my radar. It has a long way to go to prove that this is anything but another small bounce on the way to money printing hell.
Chart Requests
Every Wednesday, I do a live charting session with requests from paid subscribers. Yesterday I looked at:
$AAVE $AI $ALPHA $API3 $AXS $DUCKK $ETH $EWT $F $FTT $GSWAP $IOTA $KSM $LINK $LTC $LYXE $NIO $OCEAN $ONE $POWR $RAY $REN $RSR $SAKE $SOL $SUPER $SUSHI $TVK $XMR
BITCOIN AND ALTCOIN CHARTING SPREE WITH SCOTT MEKER
FREE GIVEAWAY! Wolf Of All Streets X Sovryn 1 of 1 NFT
YOUR KEYS, YOUR CONTROL
Anyone that follows me closely knows I am an investor in Sovryn. I interviewed the creator of Sovryn, Edan Yago a couple of months ago to hear his amazing story and learn more about what they are building. If you haven’t heard my interview or aren’t familiar with Sovryn, here is a quick rundown….
Sovryn is DeFi for BTC. It’s a DEX (decentralized exchange) with margin, lending, borrowing, and pools that lets you hold your keys the whole time. There is no sign-up, just pure and simple BTC and DeFi. Read more about them here: https://sovryn.app/
The Sovryn team made me this sweet “Wolf of All Streets” NFT (pictured above), which I want to give away to one of my readers, along with $100 in $SOV. To enter, follow these simple steps. Only one entry per person, multiple entries = disqualification.
1. Follow me on Twitter (https://twitter.com/scottmelker)
2. Follow Sovryn on Twitter (https://twitter.com/SovrynBTC)
Don’t wait too long to enter, I will randomly draw a winner in the coming hours that is following both of the accounts. If you already follow Sovryn and I, you will automatically be entered.
Stablecoins Are A Major Reason To Be Bullish On Ethereum
Stablecoins: Bridging the Network Gap Between Traditional Money and Digital Value — Brought to you by GMO Trust
According to a new research report from The Block, in 2020, 70% of all stablecoins ran on the Ethereum network. The next closest competitor was Tron, which had a little under 30% of the market share. Ethereum’s dominance is meaningful, considering that in 2020 the total supply of stable coins grew tenfold. 2021 is shaping up to be another year of endless milestones, with many exchanges reporting higher volumes in January than the entire year of 2020. Ethereum clearly has real-world use cases, considering the majority of the crypto market is being built on top of it. The clearest example right now is the explosion of NFTs, which directly rely on Ethereum. Ethereum has a lot of room to grow in 2021 and it will probably end up surprising a lot of people.
The Token Taxonomy Act Is Back
This is the 3rd time this bill has been introduced to the House of Representatives and hopefully this time it will stick. With no major changes, the bill aims to “exempt certain cryptocurrency tokens and digital assets from US securities laws” and also “make crypto-to-crypto transfers tax exempt and change the tax structure for cryptocurrencies held in an individual retirement account.” 
The odds of the bill passing seem low considering how far reaching its advantages are for the crypto space. Furthermore, the federal mandate would wipe out the individual rights of states to write and create their own laws around digital assets. - something that we are seeing in real time in forward thinking locales like Wyoming. Realistically, the bill will only raise awareness around some of the issues faced by crypto investors and enthusiasts with regards to legislation and taxes.
NFTs Could Soon Be Used In Everyday Life
Real Utilities for NFTs Heat up the Industry - The Wolf of All Streets
NFTs, or non-fungible tokens, have taken over DeFi as the next hype train to gather speed hurtling across the wild west plain that is blockchain. But they appear to have hit a mental snag for many people. They are simply not relatable, nor are they of much use to most of us.
There are a few different companies that are currently exploring the ability to add attributes (utilities) to NFTs. This not only allows for the assets to become more “relatable” and “useable”, but the value starts to get detached from its uniqueness to some degree, and starts to become attached to its usefulness.
Property is one of the most lucrative investment assets across multiple eras, not because they are rare or unique, but because they are something everyone needs and can use. And when you combine unique or rare aspects to the usefulness of property, you get some very expensive assets.
Origin, Opensea, EtherCards, and Enjin are just some of the projects that are exploring this with NFTs. Make sure you read up on how these projects are making waves in the NFT for a more detailed blog arriving soon.
The Wolf Of All Streets Podcast Ft. Robert Breedlove
Podcast - The Wolf of All Streets
Fixing the Biggest Scam with Bitcoin, with Robert Breedlove
After exiting the hedge fund world, Robert Breedlove’s fascination with the concept of money grew. In a pursuit to better understand its foundation, Breedlove dove headlong down the Bitcoin rabbit hole and came out the other side in full support of an evolved financial system relying on hard money principles and freedom, aka Bitcoin. Now Robert hosts the “What is Money Show,” in addition to prolifically writing about Bitcoin, blockchain, and crypto at some of the deepest philosophical levels.
In this episode, Robert and I discuss a range of topics including:
  • Answering the question: “What is money?”
  • Thinking in dollars
  • The study of central banking
  • Why pay taxes if the government can print
  • A digital age renaissance
  • The central bank scam
  • Bitcoin as a barometer
  • Freedom of economic speech
  • The 5 properties of money
  • Enrichment vs dilution
  • Bitcoin as a call option on the future gold standard
  • Physical vs. digital gold
Nexo - Earn Yield, Get A Loan And Trade
Instant Crypto & Fiat Exchange
Unless you’ve been living under a rock, you know that one of the most exciting use cases of crypto is to both earn yield and get low-interest credit loans, especially since you earn next to nothing in your actual bank account. 
Nexo, who I am proud to say is my newest podcast sponsor, is leading the charge in this arena with 360-degree crypto banking services.
If you are looking to park your crypto and earn yield, you can make up to 12% annual interest for doing nothing. If you are looking for a loan, they have them for as little as 5.9% APR and you don’t have to sell your crypto which is a taxable event. Their credit lines are dynamic, meaning that as the value of your crypto goes up, so does your available credit. Really cool and innovative.
Check them out HERE and put your crypto to work for you.
Phemex Trader’s Arena
Bitcoin Futures Exchange|Phemex
My friends at Phemex have launched a team competition for traders with a prize pool of up to 45 BTC! You can make your own team or join an existing squad with as little as 0.005 BTC in your trading account. The first 2000 participants will receive an extra $10 trading bonus so don’t miss out.
My Recommended Platforms And Tools
This is where I trade with leverage and can also trade spot with no fees.
This is where I spend my days teaching and learning! Our Discord group is a one stop shop for everything you need to learn to trade and control your emotions. Feel free to DM me on Twitter or respond to this email for questions. Code Wolfsden50%off for a 50% discount on the first month.
This is where I invest, commission-free. They now let you earn interest on your Bitcoin held in Voyager, so you can compound while trading. Not only that, you’ll get $25 in free BTC when you download & fund.
Rewards Code: Scott25
I use RoundlyX to buy small amounts of Bitcoin every single day. They automatically round up my credit card purchases (with 10x multiplier) and invest them in crypto. Absolutely brilliant. Passively invest money you don’t need without a thought. Further, they have integrated with Voyager (see above) to offer commission-free purchases.
Rewards Code: WOLF
The platform I am using for my taxes. My trades were automatically imported after setup and displayed nicely. The tax report was quick and easy to create in the app. I can also track the performance of my assets in the app. With Blockpit, I no longer have to worry about realizing profits or losses in time. 10% discount using the link above!
Binance is finally available in Florida!
Concierge Phone Service for Americans that protects your from SIM Swaps and other phone related hacks. I cannot stress enough how amazing this service is.
Follow me on Twitter at @scottmelker. This is where I am constantly updating my trades and sharing ideas.
On-chain and fundamental analysis, research, predictions and indicators, all in one place. Highly recommend.
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.
Did you enjoy this issue?
 
Become a member for $15 per month
Don’t miss out on the other issues by Scott Melker aka The Wolf Of All Streets
You can manage your subscription here
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue