The Wolf Den Crypto Newsletter

By Scott Melker aka The Wolf Of All Streets

The Wolf Den #256 - The Parable Of The Ox Revisited (FREE ISSUE)


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June 3 · Issue #256 · View online
The Wolf Den Crypto Newsletter
One of the most common questions that I am asked about Bitcoin is “where is all of this going?” Back in early December, my team and I discussed where we thought the top of this cycle would be, and each of us had our own favorite chart, model, or prediction that didn’t offer any more clarity than the next. After mindless debating, we found an old wives’ tale to actually help us land at an agreeable Bitcoin top prediction - The Parable Of The Ox.
The “Parable Of The Ox” is about a competition in the early 1900s where hundreds of people would attempt to guess the weight of an ox at a county fair. The winner got to keep the ox. Farmers, mathematicians, philosophers, locals, and travelers took the competition very seriously. At one point, famous statistician Francis Galton recognized that the average of all guesses was extremely close to the actual weight of the ox. Rather than throw out his own educated guess, he relied on the accrued predictions of others, including even the absurdly low and high guesses. What he found was that the average of everyone else’s predictions almost perfectly matched the weight of the ox.
Galton’s method works very well in finance, especially when a million people are shouting a million guesses on each end of the spectrum. Crypto Twitter has offered us the opportunity to look at everyone’s guesses, including the ones we both love and hate. So back in December, we decided to compile the top 9 Bitcoin predictive models, and taking the average of the predictions, we calculated $235,000 to be the average prediction for this cycle top. You might think that our 9 favorite models aren’t a good representation offered by the market, but we found someone who ran the same test after ours on the 200 top predictions. His average turned out to be $231,931, giving strong confluence to our idea in general.
Will it go there? I have no idea, but I do find the calculation to be a reasonable sweet spot. There are so many variables affecting where the cycle top could land, so I won’t bother spending too much time on the idea, but the simplicity of the prediction is fascinating and one that I can’t help but consider. I have continued to cite this magic number during interviews and press conferences and plan to stick with it through this cycle. $235,000 here we come (hopefully).
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In This Issue:
  1. The Parable Of The Ox
  2. Bitcoin Thoughts And Analysis
  3. Altcoin Charts
  4. Chart Requests
  5. How To Sell BitClout Tokens
  6. Google Is Welcoming More Crypto Ads
  7. Biden Administration Focusing On Crypto In Ransomware Attacks
  8. Central Bank Digital Currencies Are The Future (In Russia)
  9. The Wolf Of All Streets Podcast Ft. Henry Fong
  10. Check Out Cosmos!
  11. My Recommended Platforms And Tools

Bitcoin Thoughts And Analysis
It is only Thursday, so too early to truly judge the weekly chart. That said, last week we had an inverted hammer candle which I identified as a likely sign of a reversal. For now, we have nice bullish follow through, which would confirm a likely bottom if it closes anything like it looks today. That’s a tall order with three full days left, but we will be watching.
I also love how price has held the 50% retracement level from the $3,800 March 2020 bottom and the 61.8% retracement level of the entire move up from around $9,800.
All eyes are on this symmetrical triangle for now. I have been talking about it for days, and we appear to have an attempted breakout in progress. That’s the good news. But… we need to see price close the day above the triangle, or this could be an epic fake out or bull trap.
Also, there’s minimal volume, not great. We want to see real buying interest and volume kick in throughout the day if we are going to view this as a true breakout.
Still, definitely encouraging.
At the end of the day, the blue line at 42K is really the key to this reversal. Everything below that is noise.
For those of you who use MACD, we have a confirmed bullish cross on the daily with MACD completely bottomed out. This is usually a reversal sign, when the blue line crosses above the dark line. Also, the histogram (the little vertical lines in the middle) has crossed to the bullish side, another bullish signal. This looks good if you like MACD.
Altcoin Charts
Alts are looking decent today on the cusp of Bitcoin 2021 Miami and a potential Bitcoin breakout. It could be a good end of the week and weekend. Yesterday’s DOT trade is moving beautifully, and Monday’s DOGE trade made a 50% move to the upside.
I would still proceed with EXTREME caution. A large Bitcoin move in either direction could destroy altcoin momentum, so if you are trading right now, make sure your stops are in place and your positions are sized correctly.
I am sharing ETH, because bullishness on this coin should signal relief or upside across the board on many alts.
BNB looks great on both pairs, which I posted days ago before the move. Now it appears to be breaking the last key resistance at 423.83 before heading up to the next targets. We want a 4 hour candle close above that line. The safest entry at that point, assuming you missed the breakout of the inverse head and shoulders below, is a retest of the blue line as support.
Ethereum continues to look strong on both pairs. A few days ago, I posted the breakout through the descending black resistance, which then retested almost to the sat. It has moved somewhat sideways since, consolidating below resistance at .07374. I would be more convinced of this move with a break above that line, because it would make a higher high and confirm the last higher low since the bottom. Regardless, the target of the breakout we already have is the highs around .0824.
I have seen quite a few names for the pattern that has formed at the bottom of these altcoins - inverse head and shoulders, complex inverse head and shoulders, adam and even double bottom (I disagree with this technically, as the rounding bottom is not low enough), bear pennant, and it does not really matter. What matters here is that price is breaking through resistance, invalidating the bearish case for now (technically) and making us look towards bullish scenarios. The idea is drawn above - IHS neckline break with target drawn based on the depth of the pattern. This would bring us back to $4100.
I would expect quite a bit of resistance around that blue supply zone, if this does continue up.
My only concern across the board is volume. There’s a minimal spike and we really want to see serious buying on breakouts. This could mean these will end up being fake outs, so continue with caution.
I noticed this on the livestream yesterday and took a note. While it may be no big deal, this is the only coin I saw that had a real volume spike on the breakout, which you can see when price passed through the descending blue resistance.
This is an easy setup for a trade, you can place a stop loss comfortably below the ascending blue line and move it up if price rises.
We have a confirmed breakout, so price should return to the top of the blue line, .533386. That would be immediate target, although we all know that targets are just ideas and that patterns rarely play out that perfectly.
This has “confirmed” a reversal though, so it looks better than most.
Chart Requests
Here is yesterday’s charting livestream - I looked at about 30 coins requested by you guys, which was most of the ones you asked for. Enjoy!
Chartapalooza - Bitcoin And Altcoin Charts
How To Sell BitClout Tokens
Back in March when BitClout first went live, I was quick to warn readers that the site does not offer an offramp for your money. Once crypto is deposited to the platform, it can’t be withdrawn. Due to no official offramp, I was under the impression that gains made on the site were worthless, but a recent podcast guest proved me wrong. I will be releasing an episode today with Henry Fong, a DJ turned crypto trader who found a simple, yet genius way to extract money from the platform. After joining a BitClout Discord and advertising the coins he made from trading on the platform, he advertised his BitClout tokens at a discount and received a payment off-site. He then proceeded to send the coins to a buyer on the BitClout platform. The caveat to this is the obvious risks involved with who you are selling to and the required discount to unload the tokens. Since finding a buyer is challenging and withdrawals don’t exist, Fong had to sell his stack at a hefty discount. OTC trades like these are extremely risky, but if you have tokens on there, exploring your options could be worth a shot. Just exercise extreme caution. Due to security laws, there likely may never be an offramp on the site. The full story is in the podcast linked below.
Google Is Welcoming More Crypto Ads
Update to Financial products and services policy (June 2021) - Advertising Policies Help
Back in early 2018, Google put its foot down on all crypto advertisements across its platform. This harsh ban was later revised to allow only crypto exchanges to become certified advertisers. Now the “ban” allows for wallets as well. Google isn’t paying around though, because advertising on their platform means serious compliance ie. “be registered with FinCEN, be an official bank chartered entity, comply with every local and federal legal requirement, plus Google’s own policy.” The official press statement also included a non-exhaustive list of what isn’t allowed to be advertised (basically everything crypto-related) - my newsletter and podcast would fail to meet the required rules if I tried to apply to advertise. It seems like Google is taking the same road some of the major financial institutions are taking with crypto - a painfully slow and methodical approach. Google’s policy feels the same as an investment bank allowing only their wealthier clients to buy Bitcoin - a baby step. Nobody wants to lose money, and I imagine Google will soon allow education and other healthy crypto-related companies to advertise.
Biden Administration Focusing On Crypto In Ransomware Attacks
Biden Pushes Crypto Analysis in Ransomware Response - CoinDesk
Ransomware is not a new problem, but the ransom requested has primarily been in Bitcoin of late, with high profile cases arising left and right. The Biden Administration is understandably concerned, and is investigating how crypto is being used in these attacks. This is not a big deal for the space - criminals will find ways to get paid, Bitcoin or otherwise. But it does mean that there will be renewed focus and likely FUD surrounding the “Bitcoin is for criminals” narrative.
Central Bank Digital Currencies Are The Future (In Russia)
Russia's Central Bank Governor: CBDC Is Future for Country's Financial System - BeInCrypto
We all know that technology is unstoppable and that the future is digital. Money is no different. Every country will eventually move to digital currency, whether blockchain based or otherwise. That said, it is interesting to see it stated so plainly by the governor of a central bank. Clearly, Russia is taking a move towards a CBDC very seriously.
The Wolf Of All Streets Podcast Ft. Henry Fong
Podcast - The Wolf of All Streets
Henry Fong grew up in a small town in Florida and spent his younger years surfing and fishing until he stumbled upon a pair of turntables. Honing his artistic craft, Fong’s unique electronic style blew up worldwide, garnering a loyal fanbase anywhere he went. Once COVID-19 hit, Fong’s touring days were no more, which drove him to discover new hobbies including trading, real estate, and cryptocurrency investing. In this extraordinary episode, Fong shares how he turned himself into a multi-talented businessman in a matter of months, straight out of the music industry spotlight.
In this episode Henry Fong explores:
  • Becoming a Florida DJ
  • Selling the Ethereum top
  • NFTs as creative outlets
  • Sampling music
  • Owning a CryptoPunk
  • The trick to exiting BitClout
  • Electronic dance music
  • Celebrities leaving LA
  • The return of big crowds
  • Learning technical analysis
  • Getting into real estate
Check Out Cosmos!
Cosmos: The Internet of Blockchains
For the first time, rather than a company or project sponsoring the podcast and newsletter, a grassroots community is! The Cosmos community is extremely passionate and active and because of that, cool things like this sponsorship can happen. Their $ATOM token has been on fire and solidified itself as a top 50 coin by market cap and the Cosmos platform has so much more coming.
Cosmos is the port city connecting chains like Bitcoin and Ethereum to ensure your liquidity on any chain can be used anywhere. Their new Gravity DEX coming out will connect to any blockchain where you can swap ETH ERC-20, BSC or any token with $ATOM. Plus there will be order books on the DEX which is a tool only enjoyed by centralized exchanges…until now. You have to check out what Cosmos is doing and take a look at their $ATOM token.
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
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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