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The Wolf Den #365 - Asymmetric Bets

November 4 · Issue #365 · View online
The Wolf Den Crypto Newsletter
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Given a 10% chance of a 100 times payoff, you should take that bet every time.” — Jeff Bezos
The idea of taking bets with asymmetrical upside is nothing new. As I discuss often, poker players will push all of their chips into a pot when the odds are against winning the hand because the “pot odds” favor the move. If you have a 30% of winning the hand, but only have to bet $100 more dollars with the chance of winning $1000, you make that bet every single time.
The caveat to Bezos’s quote is that you can’t make this bet with all of your capital. And an important nuance it is! A poker player might push in all of the chips they have on the table, but they likely only have about 1-2% of their entire bankroll in play.
If you put your entire portfolio into a single investment that only has a 10% chance of success, the odds are irrelevant. 90% of the time you will be left destitute.
The spirit of the quote is correct, but the context is important. This is why traders ONLY TRADE with a small part of their portfolio, keeping the rest in stronger long-term investments. You can make the “Bezos bet” with a small percentage of your portfolio many times over without blowing up your entire portfolio.
Never go truly all-in on a bet with a low chance of success - rather, risk what you can afford to lose on the chance that the small position becomes a life-changing investment.
To accomplish this, you need to be really good at riding the highs and cutting the lows.
“Selling your winners and holding your losers is like cutting the flowers and watering the weeds.” – Peter Lynch
Investors and traders are often drawn into a strange, seemingly counterintuitive phenomenon - letting their losers run while cutting their winners short. This seems strange but can be explained easily in the context of the emotional side of trading. In an effort to be “right,” traders will take profit too early in fear that they will eventually be “wrong” if they let it run. On the flip side, realizing a loss on a trade is also an admission that they were “wrong,” therefore compelling a trader to continue losing in an effort to eventually be “right.”
We all know what we SHOULD do, right? We should cut the losers early and let the assets that are performing well keep going to continue to pay for those small losses. It’s a few huge trades a year that make a trader most of their money. These huge trades can’t happen if you cut them short.
Strong hands always prevail.
To my free members (I love you!) - paid members receive emails like this one 5 times a week - Monday through Friday. Every Wednesday I chart any request sent by my paid members, often over 30 charts. It’s a ridiculous amount of work, but I do my best to add real value to anyone who subscribes. If you would like to join the paid side, you can do so for $15 a month here.
In This Issue:
  1. Asymmetric Bets
  2. Bitcoin Thoughts And Analysis
  3. Altcoin Charts
  4. Legacy Markets
  5. Is Bitcoin A Speculative Asset? From IntoTheBlock
  6. SHIB Momentum Explained From IntoTheBlock
  7. Chart Requests
  8. The Push For A Bitcoin Spot ETF Continues
  9. Shiba Inu Community Is Petitioning Amazon 
  10. New York City Elects Bitcoin Mayor
  11. Holoride Brings Metaverse To Every Car With Elrond 
  12. The Wolf Of All Streets Podcast Ft. Alex Krüger
  13. My Recommended Platforms And Tools

Bitcoin Thoughts And Analysis
I like to include this chart in every free issue, because we have new subscribers and I want to stress the importance of zooming out.
The monthly chart shows an ascending channel that has been valid since 2013. Each and every time that the EQ (equilibrium, center dashed line) of this channel has been flipped to either resistance or support, price has visited the bottom or top of the channel.
Price just flipped the EQ to support, after 6 months of testing that level. 6 monthly candles in a row! If history repeats (it does not have to), then price should visit the channel highs, giving us multiple 6 figure targets, depending when it happens.
When in doubt, zoom out. On large time frames, it truly look like this Bitcoin move is just getting started.
Indecision. The weekly chart shows the massive breakout through the blue line and the higher high that invalidated any bearish case a few weeks ago. After that, we saw bullish follow through.
Now we have 2 candles in a row, with a 3rd potentially forming, that indicate indecision. The first blue) was a shooting star, often viewed as a top pattern but requiring confirmation from the next candle. This candle also had a bearish SFP (swing failure pattern), with a wick above the previous all time high and close well below. The following candle was an indecisive spinning top, with another spinning top potentially forming now. It is way too early to judge this weekly candle.
At this point, bulls want to see a break and close above the all time high.
Bitcoin price continues to trade around the red neckline of the local inverse head and shoulders and the black descending line that indicated a breakout of the recent consolidation from the all time high. Assuming candles continue to close above these lines, we should see price returning to the recent all time high as targets of both patterns.
BOTTOM LINE. Bitcoin is trading somewhat sideways, still largely consolidating in advance of the next move. All time frames still look generally very bullish.
Altcoin Charts
I do NOT share signals in this section. I share setups and charts that I am watching, in an effort to help show you how I view a chart and what criteria would be necessary for me to consider taking a trade. NEVER blindly buy something because it is listed in a newsletter or posted on twitter. You need to have a plan when you enter a trade. These are just ideas, and are almost always “if, then” scenarios. If a certain set of things happen, then I would consider a trade.
Layer 1 coins continue to dominate, making new all time highs and retesting them as support before entering price discovery. We have seen it over and over again with Solana and others. I shared it on DOT this week. EGLD and AVAX are both doing it today. This has been an easy trade for months. It won’t always repeat, but ride it until it does not work.
Our recent trades have been great - it’s been a solid run. But never forget to manage your risk, use stops, and lock in gains.
AVAX just made a new all time high but is sitting at resistance. You do not generally want to buy until you have confirmation in the form of a close above resistance. If this closes above, we will have a new all time high and look for the same retest as support that we have seen over and over again on layer 1 coins. You can see that bullish market structure is intact, with a series of higher highs and higher lows. The most recent higher low was just confirmed with this higher high.
Blue skies ahead once this closes above $79.80.
There is no clear entry at the moment, but EGLD is clearly a “buy the dip” asset for the moment, so keep in mind that it has broken out of the blue descending wedge and is headed to the recent highs as the target.
This is not the first time I have shared this - subscribers have seen these charts before.
Newsletter subscribers know that I am a huge fan of Elrond. We traded ERD two years ago from 15 sats to 300, and have traded EGLD from $10 to the current price.
Believe it or not, another opportunity seems to have presented itself, with a break of the all time high and retest as support. This means that price is, once again, heading into discovery for new highs. Market structure continues to be bullish, with higher highs and higher lows. No reason to believe this is ready to stop yet, unless Bitcoin makes a major move.
Paid subscribers have seen this chart a number of times, but I wanted to share it because there is still some opportunity, albeit a bit “late.” Our entries were the break of the blue descending flag and yesterday’s reset of the all time high as support. You can see that I circled the area a few days ago.
The $39 target was already in play on the break of the blue descending line, but now it’s clear sailing because the last key resistance (previous all time high) has been broken and retested as support, almost to the dollar.
This can go much higher than the target - it is in price discovery.
Legacy Markets
Meta Platforms, aka Facebook, is forming a morning star pattern on the weekly chart, with a clear retest of the 50 MA (blue line) last week. As you can see, two weeks ago we had a gap down to open, then a long legged doji with a green body to follow, a bullish signal. This week gapped up and now looks likely to close bullish, but we need to wait 2 days for confirmation.
If this happens, we have a very clear bottom signal and price should continue up to at least the highs.
Is Bitcoin A Speculative Asset? IntoTheBlock
The Wolf Den research team uses IntoTheBlock to dig deeper and get the most important insights about the crypto market.
Is Bitcoin a speculative asset? Think again.
The UTXO chart shows the volume of transaction activity over time relative to age, with colors blue to red based on how recent those coins were last transferred. The recent growth of the yellow bands points to an increase in the number  of coins that have entered the market over the past 6 to 12 months (this currently accounts for 20% of Bitcoin in circulation). While the blue band measures for transactions several years older, which continues steadily to grow, pointing out how Bitcoin is becoming less and less transacted and thus stored as an investment over time.
The data can be gathered in a single metric that takes into consideration all Bitcoin addresses and their activity. This is calculated by averaging the holding times of all addresses before they transfer (or sell) Bitcoin. The average time that Bitcoin is held is 3.3 years. Over an asset with a lifetime of 13 years, it can be concluded that Bitcoin on average has been held for more than one quarter of its lifetime.
These analytics show that, behind the buying activity of Bitcoin, there is a real demand of investors that want to hold the asset for the long-term. This is in line with the thesis that Bitcoin is being used mostly as a store of value, which can be held for years without it losing its value. In fact, in the last month, there have been opinions by influential institutions like JPMorgan and Paul Tudor Jones assessing Bitcoin as a better inflation hedge than gold. So far this has been true for Bitcoin, and there are no early signs that holders should start thinking otherwise.
SHIB Momentum Explained - IntoTheBlock
SHIB has been the hottest topic in crypto. In a ridiculous rally, Shiba Inu (SHIB) pushed its market capitalization past Doge. The debate about the macro-factors behind the SHIB rally have been all over the news. By leveraging the blockchain’s transparent nature, we can provide some interesting insights about it.
SHIB transactions over $100k have skyrocketed, showing momentum among large investors. This shows that the SHIB rally is not only about small transactions.
As evidenced by the graph above, over the past 30 days, SHIB investors have transacted over 30 billion in on-chain transactions greater than $100k. Looks like the SHIIB momentum is attracting big players as well.
And by going deeper into the total transactional volume, we discovered that in just 30 days, SHIB on-chain volume surpassed $36.18 billion. What’s impressive about it is that it represents over 9.19% of the entire Ethereum transactional volume in that period.
Shibaswap, transacted more the $3.9 billion and generated over $11.731m in Fees. This is a 657% increase vs September.
But what about the holders? 
1) Most addresses are holding SHIB between 1 month and 12 months and not aggressively trading. This is a change of pattern over the past few months. Previously, short term trading dominated.
2) You probably heard about the addresse that bought $8,000 worth of SHIB a year ago thatd is now worth >$5b. Well, there are close to 5000 SHIB holders that bought around 20% of the all-time-low price. Some people are making serious money with SHIB.
The All Time Lowers indicator shows the addresses (with a balance) that bought within 20% of the token’s all-time low price.
Chart Requests
Every Wednesday, I take requests from Wolf Den subscribers and look at them live on YouTube. Here are your charts!
The Push For A Bitcoin Spot ETF Continues
Emmer and Soto Advocate for the Trading of Bitcoin Spot ETFs | Press Releases | Congressman Tom Emmer
The approval of the futures-based Bitcoin ETFs has not stopped some government officials from pushing for the more desirable spot ETF. Congressman Tom Emmer ® and Darren Soto (D) wrote a powerful letter to the SEC advocating for the spot ETF yesterday. The letter is compelling, and makes it clear that spot based ETFs are superior and viable. Here is my favorite paragraph from the letter:
Spot-based ETFs have proven more efficient and are strongly preferred by investors, as evidenced by their commercial success; we believe the same will be true for Bitcoin exposure in an ETF wrapper. For example, today investors can gain exposure to gold through both the spot based SPDR Gold Trust (GLD), which is registered under the Securities Act of 1933, or the futures-based Invesco DB Gold Fund (DGL), which is registered under the Investment Company Act of 1940. In its 15 years trading in the U.S. public markets, GLD, the largest of all the commodity-based ETFs, has not experienced any material investor protection issues and holds $55.5 billion in assets compared to DGL’s $50.4 million (less than 1% as much). Investors clearly prefer spot-based commodity ETFs over ones that hold futures.
Shiba Inu Community Is Petitioning Amazon
Three SHIB Petitions for Amazon Adoption Gain 173,373 Signatures
3 separate petitions on asking Amazon to accept Shiba Inu as a payments option have garnered attention . As comedic as the petitions are, the turnout has been incredible, with nearly 200,000 unique signatures (likely more now). If you want a laugh, or to sign the petitions, here are their names.
SHIB4Amazon - Ask Amazon to add SHIB as a payment“ 
Kindly request Amazon start accepting SHIBA INU as a form of payment
Please accept Shiba Inu cryptocurrency as payment for Amazon products and services
New York City Elects Bitcoin Mayor
Eric Adams, Mayor of All the Bitcoins | David Z. Morris - CoinDesk
New York is welcoming Eric Adams, an outspoken proponent of Bitcoin, as its newest elected mayor. During the campaign, a video went viral of Adams awkwardly mentioning Bitcoin in a speech, saying he wanted the city to be the “center of Bitcoins.” It looks like there is even some friendly competition brewing, because Adams recently said, “Miami, you had your run. We’re bringing our businesses back.
Audi-Backed Holoride Brings Metaverse To Every Car With Elrond
Audi-backed holoride Makes Its Blockchain Debut On The Maiar Launchpad In November, Marking The First Project To Be Hosted On Elrond’s Strategic Accelerator Platform – ChainWire
The Metaverse is expanding into the automotive industry.
Audi-backed holoride is building an Extended Reality (XR) platform that integrates vehicle movements into virtual reality experiences. Not only can you stay logged into the Metaverse on the move, but you can fully immerse from the comfort of your vehicle.
In the 2.5 years since its inception, holoride has engaged in collaborations with Audi, Porsche, Daimler, and Ford, as well as heavy hitting media companies such as Universal Pictures, Disney, and Discovery Channel. They are building their NFT economy on the Elrond Network, with their RIDE token to debut on Elrond’s strategic incubator, the Maiar Launchpad. Below is the original news from May that explains the partnership.
Audi-backed holoride To Transform Every Car Ride Into The Ultimate Entertainment Experience Via Extended Reality And NFTs On The Elrond Blockchain · Elrond
The Wolf Of All Streets Podcast Ft. Alex Krüger
Podcast - The Wolf of All Streets
Alex Krüger is a well-known crypto economist, famous for his hot takes and insightful thinking regarding all markets. He has a knack for putting crypto in the context of global markets and shared his thoughts on various topics in this whirlwind episode. He also made the case for million-dollar Bitcoin. You don’t want to miss this.
In this episode, Alex Krüger and I discussed:
  • Dog coin madness
  • Bitcoin’s macro drivers
  • Interest rates and FED tapering
  • Are we fighting deflation
  • Is Bitcoin a correlated asset?
  • Is there any upside left?
  • The Bitcoin futures ETF
  • Stablecoin regulation
  • Short bankers, long Bitcoin?
  • What is up and coming?
  • CBDCs are coming
  • What coin(s) are Alex excited about?
This episode is sponsored by: ARCULUS and KAVA
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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.
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