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The Wolf Den #206 - How To Spend Your Stimulus Check

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March 25 · Issue #206 · View online
The Wolf Den Crypto Newsletter
How To Spend Your Stimulus Check
With the passing of the 3rd stimulus bill, a new round of helicopter money is on the way to most Americans via check or direct deposit. Most people will not have a choice on how to spend this check because they will need it to survive. If you do have the luxury of making a decision, here’s how you should consider spending it.
1.    Cover essential expenses - Rent, mortgage, food etc. This is obvious, but I can’t leave it off the list. Essential living expenses come first and should be the entirety of the check if necessary.
2.    Make sure next month’s bills are covered - If your basics are covered, experts say you should sit down and prioritize which bills to pay next. While many people won’t receive enough of a stimulus payment to cover all of their monthly bills, especially if they’ve lost their job, you can make a list of which ones are most important. 
3.    Put it in your emergency fund. It’s a good idea to save at least some of your stimulus payment. Even if you’re financially secure now, an emergency fund, or rainy-day fund, is a financial backstop if you later lose your job or experience other financial hardship as a result of the pandemic. Everyone should have a minimum of 3 months’ worth of expenses saved and set aside in cash. 6-12 months is even better. This is cash that is separate from all of your other portfolios and is sitting somewhere that it is readily available.
4.    Buy Bitcoin. If you have the rare luxury of not needing your stimulus check and already have an emergency fund, then investing a bit in Bitcoin is a great hedge against global uncertainty and currency inflation. Buy it and forget about it. The same could be said for Gold, but that’s not why we are here!
5.    Donate it to someone in need. Most people are struggling at the moment. If you truly do not need the stimulus and it happens to come your way, consider giving it to a friend or family member in need, or donating it to an organization that will distribute it wisely.
This stimulus package is not a gift to the people - it’s a low-cost bribe to keep everyone in check. It will barely assist those that need it the most and will further stimulate the market by benefiting the wealthy. The worst part is that our children will pay for it tenfold in inflation.
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In This Issue:
  1. How To Spend Your Stimulus Check
  2. Bitcoin Thoughts And Analysis
  3. Altcoin Charts
  4. Chart Requests
  5. The Inverted Hammer Candlestick
  6. The Right Mindset For Trading
  7. Goldman Sachs Is Opening Up To Bitcoin
  8. The Week Of Bitcoin ETF Filings
  9. Tesla Is Forcing The Hands Of Its Competitors
  10. Shyft Network - Assigning Context, Trust, & Validation 
  11. The Wolf Of All Streets Podcast Ft. Koroush AK
  12. Check Out Matcha
  13. My Recommended Platforms And Tools

Bitcoin Thoughts And Analysis
WEEKLY CHART
Last week we had a “hanging man” candle on the weekly, which I have discussed here at length. Many were calling it a bullish candle, which remind us that context and placement matter! This would be a bullish hammer at the bottom, but at the top it is a potentially bearish signal. It indicates that selling interest increased during the session and that bulls were unable to advance price. It’s meaningless without looking at the next candle, which is presently bearish but with 3 days still to go. I would love to see bulls push hard through the end of the week to invalidate the bearishness of that hanging man.
DAILY CHART
The daily is in an interesting spot. It clearly broke support at $52,640 and retested it today as resistance. This candle is not yet closed, so too early to confirm that. Of note, price is currently testing the 50 MA on the daily as support, a line that has not broken down since September of last year, and only has been retested as support once since it broke back above soon after.
Bulls who use MAs REALLY want to see this hold on the daily. Below is the wider view.
4-HOUR CHART
The 4-hour has lost both the 50 MA and 200 MA as support over the past few days, which is not ideal for bulls. That said, it rarely trade below the 200 for very long, so I would expect at least an attempt to break back above in the coming days. You can see that price has dropped into and bounced directly from the key demand zone on the 4 hour chart, in red. If that fails, another huge area of support is below around $48,000. The next key area below that in my mind is the previous all time high around $42,000 that was never technically retested as support. I would buy all the Bitcoin possible if price dropped that far.
Important to note - there has been real volume on this selling, so this is not technically bullish consolidation until that subsides. Volume increasing with selling confirms the sell off as real bearish price action in the short term. This is presently the largest 4 hour volume we have seen in a long time. That raises the question - is it a selling climax (much like a blow off top after a move up) or is this just gaining steam. Ideally, we want to see huge volume paired with a long wick or major reaction from bulls.
I can’t count how many times I have said that bull pennants often break down and become flags. We ultimately did see a break of that ascending support and a retest of it as resistance before the move down. We did NOT get a perfect flag, the wick is a bit low, but the idea is absolutely valid and could signal that we are near a bottom here. If this does happen, this is a very bullish pattern and eventually should break to the upside. This candle is yet to close, could end up lower. That would still make it a descending broadening wedge.
Every single time 4 hour RSI drops to oversold, I draw this idea. It’s been correct 4 of the last 5 times that price reached here, so might as well try again. You know that I love an oversold bullish divergence! We had potential divergence yesterday, but ultimately we never saw the confirmation from a definitive “elbow up” on RSI. That’s fine, I actually wanted to see RSI drop into oversold, as it barely missed on the last drop.
If it closes oversold, I will be watching for something like I drew above - not specific to the time frame I drew it on, but the general idea that price will make a lower low and RSI will make a higher low. This could go far deeper into oversold before that happens, so this is simply an idea.
HOURLY CHART
I rarely zoom in this far, but we do have confirmed and also greater potential bullish divergence with oversold RSI. I am sharing, because a reversal is often seen when divs build across time frames… the hourly, then the 4 hour, then the 6 hour etc. That could happen here, so this is worth watching.
Altcoin Charts
As I continue to say, altcoins have been very risky in the recent past and are very hard to trade reliably. I have not posted many setups for this reason and the market has once again justified that decision. Subscribers often comment to me privately that they want “more setups.” I post a ton of setups when the market is prime. Part of good risk management is knowing when to sit on the sidelines, which has been the case here for a bit.
Today I want to just take a quick look at ETH, because it can be the bell weather for the entire market - and I am cautiously optimistic.
ETH/BTC
Ethereum has been utterly sideways against Bitcoin for quite a while, causing an obvious drop on the USD pairs as Bitcoin has corrected. But there’s cause for some optimism. I have been posting this setup for weeks, with the descending black line being the key to the down trend ending. For the first time, we are seeing a potential break of that line. We really want to see a close here, just in case price drops and this ends up only being a wick through resistance - a fake out.
Further, yesterday’s candle formed a clear bullish SFP - swing failure pattern. And SFP occurs when price breaks a key previous swing low but closes back above - causing a wick down through support. This is an indication of liquidity being found in that area to fill bids, whether in the form of longs capitulating (which are sell orders), or shorts opening on the breakdown (also sell orders to fill longs). When a big player wants to go long, they often need to purposefully push price down or wait until it goes down to a certain area where all of that liquidity is pooled.
Too early to call it, but this looks like a reversal. A break of that line with decent volume should indicate that ETH is ready to head back up and outperform Bitcoin.
Chart Requests
I looked at almost 60 CHARTS for you guys yesterday. After Bitcoin’s drop, I am sure most of them have changed, but here they are!
$ADA $ALICE $ATOM $BNB $BQX $CHSB $CHZ $CRO $CRV $ENJ $ETH $FET $FTT $GRT $HNT $HOT $INJ $LIT $LUNA $MATIC $NIF $NIM $OXT $PERP $PKF $POLS $QNT $ROSE $RUNE $RVN $SAKE $SCRT $SHROOM $SKL $SMART $SNOW $SNTVT $SPICE $SRM $SXP $THETA $TRB $TVK $UBT $UTK $UUUU $VRA $VRX $XAG $XEM $XLM
Chartapalooza - Bitcoin And Altcoins / Live Crypto Market Analysis & Charting
The Inverted Hammer Candlestick
There is a lot of confusion around the inverted hammer. I constantly like to remind you all that context and placement matter. Most people do not understand that this candle is actually potentially bullish at the bottom, much like a hammer is actually bearish at the top. If this exact same candle was seen in an uptrend, it would be a potentially bearish signal and a shooting star. Context matters!
The Inverted Hammer candlestick formation occurs mainly at the bottom of downtrends and can act as a warning of a potential bullish reversal pattern. What happens on the next day after the Inverted Hammer pattern is what gives traders an idea as to whether or not prices will go higher or lower. You always need to wait for confirmation after any candle.
The Inverted Hammer formation is created when the open, low, and close are roughly the same price. Also, there is a long upper shadow which should be at least twice the length of the real body. After a long downtrend, the formation of an Inverted Hammer is bullish because prices hesitated to move downward during the day. Sellers pushed prices back to where they were at the open, but increasing prices shows that bulls are testing the power of the bears. When the low and the open are the same, a bullish, green Inverted Hammer candlestick is formed and it is considered a stronger bullish sign than when the low and close are the same (a red Inverted Hammer).
The Right Mindset For Trading
Mr. Anderson
The right mindset for trading:

-Kill your greed

-Never chase

-Always strive for emotional detachment

-Focus on proper execution

-Know that there is never a shortage of opportunities

-Never make excuses

-Stay in control

-Don’t compare yourself to others

-Have an exit plan
Mr. Anderson is one of my favorite follows on twitter, and constantly drops knowledge bombs like the one above. I could not agree more with the ideas shared in this tweet and don’t see a reason to expand much further. These are the keys to being successful as a trader.
Goldman Sachs Is Opening Up To Bitcoin
Goldman Sachs Files Note On Ark Innovation ETF - Bitcoin Magazine: Bitcoin News, Articles, Charts, and Guides
Major financial investment companies such as VanEck, NYDIG and Valkyrie are vying to be the first to have a Bitcoin ETF approved in the United States. Slow to the race is Goldman Sachs, with a different approach. Goldman is seeking approval for an ETF to be capable of investing in Bitcoin alongside other “disruptive innovations.”
The official filing reads, “the ETF may have exposure to cryptocurrency, such as bitcoin, indirectly through an investment in a grantor trust. The ETF’s exposure to cryptocurrency may change over time and, accordingly, such exposure may not always be represented in the ETF’s portfolio.” If you found the statement to be ambiguous, you aren’t alone. Either way, Goldman is looking to give investors exposure to Bitcoin through an ETF, a very happy medium and reasonable approach to seeking an SEC Bitcoin ETF approval.
The Week Of Bitcoin ETF Filings
Fidelity to launch bitcoin ETF as investment giant builds its digital asset business
We are now at the point where it seems like once a day, a major financial institution is filing for a Bitcoin ETF. Some institutions have been in the race for a long time, others like Goldman Sachs, Fidelity, and Skybridge Capital have joined just this week. Each of the three have filed for their own unique Bitcoin ETF seeking SEC approval; some designed to offer direct exposure, some indirect. Sooner or later, the SEC will select and approve their first ETF and then move on to approving more than just one. Now that household names are filing for approval i.e., Fidelity and Goldman, the SEC may be more open to giving them approval.
Tesla Is Forcing The Hands Of Its Competitors
General Motors Considering Payments With Bitcoin
The day Tesla first announced adding Bitcoin to their balance sheet and interest in accepting Bitcoin as payment, I was quick to point out that their competitors would be forced to do the same. Sure enough, not 24 hours after Tesla officially added Bitcoin as a payment option, an article was released about General Motor’s consideration of adding the asset as an acceptable form of payment.
It should be clear by now that this isn’t just a trend related to vehicle manufacturing. It’s real-time Bitcoin game theory. Companies are wondering who the innovator will be and who will follow suit. As Bitcoin permeates all facets of society, this same behavior will occur across all industries on all size scales, with a few daring innovators leading the way.
Shyft Network - Assigning Context, Trust, & Validation
FATF Compliance Effort Adds Huobi, Bitfinex and Tether to Governance Task Force - CoinDesk
Shyft Network is a public blockchain protocol designed to aggregate and embed trust and validation into data stored on public and private ecosystems, and permissioned and permissionless networks. By facilitating bridging across siloed datasets, Shyft allows for layering of context on top of data, ultimately turning raw data into meaningful information.
Shyft Network is developing regulatory-compliant tools for Decentralized Finance that bridge the gap for centralized and decentralized organizations to ease their entry into the blockchain space. The goal is to aid mainstream financial institutions venture into DeFi and participate in a compliant manner. By lowering risk and exposure to money laundering, the Shyft Network could open up the crypto industry to large capital inflows and, potentially, millions of users from the mainstream markets.
Additionally, Shyft Network has been developing identity solutions that help centralized and decentralized applications become compliant with existing regulations. In this regard, they have partnered with various other entities in the space, notably virtual asset services providers (VASPs) who must comply with the FATF Travel Rule. Veriscope, Shyft Network’s proactive approach to regulatory compliance, has been applauded for its ability to bring together some of the most prominent liquidity providers in the space and to accelerate the potential mass adoption of decentralized applications.
Here is their website:
Unleashing Trust, Identity and Credibility networks for humanity.
The Wolf Of All Streets Podcast Ft. Koroush AK
Podcast - The Wolf of All Streets
How to Build a Winning Crypto Trading Strategy w/Koroush AK
Koroush AK has set out on a path to find the perfect balance between his trades, investments, mentality, and health. Through all the noise in the crypto space, Koroush has become a pillar of reliable advice. Educating everyone, from beginners to experts, in the crypto market. Whether you are looking for advice on trading, meditation, or just success in life, Koroush AK has a little bit of wisdom to impart for everyone.
 In this episode, we discuss a range of topics including:
 Meditating and trading
  • Bull market memes
  • Balance in the market
  • Exercise, sleep, diet, and health
  • “More money, more problems”
  • Copy-trading
  • Homeless lottery winners
  • Going stupid long on Bitcoin
  • Income ≠ happiness
  • Utility of a college degree
  • The ultimate store of value
Check Out Matcha
Matcha - Simple crypto trading for everyone
I had a long call with the team at MATCHA a few weeks ago about sponsoring the podcast, but ended up being sold on the product as a user. I only accept sponsors when I actually use the product and I have been using it alongside Uniswap. It’s easier to use, they often find better prices, and gas fees can be lower, all while having limit orders available to catch the dips when you are not watching.
I am proud to say that they are sponsoring the podcast, but wanted to show my support for their amazing product in the newsletter as well. Definitely worth checking out if you are trading DeFi.
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: WOLF25
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.
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