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The Wolf Den #413 - The Tale Of Sol Price

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January 13 · Issue #413 · View online
The Wolf Den Crypto Newsletter
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A recent tweet storm from a disgruntled financial pundit set crypto twitter on fire in a storm of memes and sarcastic rebuttals.
This is it. We have reached peak insanity. A Google search of, “Sol Price,” founder of FedMart and Price Club (Costco), mentor to Jim Sinegal, and retailing legend, turns up a page and a half of the price for Solana, evidently some 3rd-rate cryptocurrency. The world has gone mad.
You can view the tweet HERE.
This huge fanboy of massive retail stores with low prices was incensed that a simple google search of “Sol Price” ignores legendary entrepreneur Sol Price, the father of modern warehouse stores. To help support his case and add insult to injury, the Tweet thread compared Solana to both Doge and Costco.
I look at crypto prices for about 30 seconds a week. Looks like Solana, at $44B, has surged past the dog’s $20B. Maybe work on the next Costco instead? You could buy it in 2004 for $13B, earn $13B in special dividends, $11B in regulars, and own a $231B debt-free company today.
Is this a fair criticism, or can it be dismissed as nonsense?
The comparison of Sol Price (the person) and Sol Price the (asset) is ridiculous. Outside of the 12 people on earth who have made an obsession with the creators of large stores that have cheap prices their personal demigods, few famous people are remembered, and a similarly named asset is not an affront to their legacy. Should we also be concerned that we have forgotten about Tim Berners-Lee, the inventor of HTML? I had to Google it. What about Ray Tomlinson, the creator of email. I also had to Google that one. What about Alan Emtage, the creator of the world’s first search engine? Ironically, I Googled that too. I think you see where I am going with this. Even the inventors of earth shattering technologies are largely forgotten. Ideas live on, evolve, and influence our lives. They are what carry significance across time.
What about comparing Solana to Costco, or for that matter comparing any digital asset to any particular company? Is that logical? After all, Apple is bigger than all cryptocurrencies combined by market capitalization.
Comparing a company to a base layer infrastructure for a new technological class is illogical. This is a false equivalency, and a trap that we fall into in many arenas, comparing completely unrelated things and pretending they are linked. The tweeter assumes that Solana and Costco are comparable because they are both investible assets. In reality, there are an infinite amount of random combinations of investible companies and assets that have nothing to do with one another.
I can’t believe you bought your 6 year old Pokemon cards instead of Amazon stock!
You bought a family car when you could have had the world’s largest collection of vintage rubik’s cubes!?
Similarly nonsensical.
(Side note, you will argue that a family car is not an investible asset, but used cars currently sell for more than they were purchased for, years after being bought and driven)
The tweet thread is also dismissive of growth potential. The entire planet is talking about cryptocurrencies because they solve real world problems. And they are in their infancy, barely scratching the surface of what is possible. We should be excited that Solana is smaller than Costco and that crypto is smaller than Apple. Market cap is the only thing that they have in common - the comparisons should stop there. His argument makes no sense, but attempts to force crypto into a framework and context that he understands. He is completely blind to the concept of exponential growth, which is possible with Solana and not with Costco.
Weak.
The excitement around cryptocurrencies is justified. One could argue that the masses are not excited enough and that we have just begun.
One thing I am quite sure of - most base layer cryptocurrencies will exceed the marketcap of the world’s biggest retails… and it doesn’t matter. They have nothing to do with one another.
In This Issue:
  1. The Tale of Sol Price
  2. Bitcoin Thoughts And Analysis
  3. Altcoin Charts
  4. On-Chain Signs Of Conviction - IntoTheBlock
  5. Control Your Emotions
  6. Bill Proposed To Limit CBDC
  7. Turks Using Crypto As Inflation Hedge
  8. Politicians Beat The Market
  9. The Wolf Of All Streets Podcast Ft. Justin Kan
  10. My Recommended Platforms And Tools
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Bitcoin Thoughts And Analysis
Bitcoin has moved nicely off of the lows, breaking 42K and holding it as support for now. That is the first small step in many more to come to convince me that we are back in a bull market.
42K puts price back in the range that was formed on the early December drop. 45K - 47K puts price back above local resistance and the EQ of that range. 52K puts price above that range. 53K breaks a key weekly level that would mean the bull market is fully back on.
WEEKLY CHART
Beautiful weekly candle so far, with 3 days left to confirm. Right now, we have a bullish hammer, with a long wick down and a grey body, showing that bulls have stepped in and pushed price. The 42K area is key, being the bottom of the local range and the level that price has effectively traded around for the better part of a year. This was the all time high in January, 2021. 53K is still the key level for me.
TD Sequential is potentially printing a rare 9 on the weekly chart, which is considered a major buy signal. That said, in my experience these have failed more often than not. Still worth pointing out for those who use this indicator.
DAILY CHART
MACD is not my go to indicator, but I often look at it for confluence of an idea. As you can see, we have bullish divergence on both the MAs and histogram with price and also have a bullish cross of the two MAs potentially confirmed today. A break of the descending blue line would give me more confidence in a reversal here.
Price is bouncing off of Bollinger Band support, which is inevitable before the next move. The question is which direction that will be in. Price first needs to cross the blue centerline, which is a very logical resistance and lines up with horizontal levels on lower time frames, roughly $45,600. This is the next area I am watching.
This is the idea that I drew in early December, right after the big drop. Welcome back to the range and sideways chop, it should drive everyone insane!
4-HOUR CHART
These are the key levels to watch if you are actively trading, shown on the 4-hour chart. Lots of resistance ahead before a clear reversal, but nice to be back in the range.
4-hour RSI (not shown) is roughly 60, decidedly bullish after flipping 50 to support. I would expect it to go overbought now, which would likely line up with a move to 45K-46K,
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.
I also do not push many charts when the market is looking shaky, which is how I would still describe it today, although things are looking up. I am still cautious at the moment, since there is the potential for further correction, or for altcoins to suffer if Bitcoin moves quickly to the upside. Either scenario could hurt alts.
At the moment, it is “safest” to focus on the larger projects that have performed generally well in the down trend or that have a lot of interest and liquidity. Layer 1s, mostly.
LUNA/BTC
LUNA continues to look strong on both pairs, after epic trade opportunities over and over again for the past few months. As you can see above, Luna held support at .001597, a key level that was a previous all time high. As long as it is trading above this level, things are looking bright for LUNA.
The safest trade now would be a flip of .0024 and a new all time high, with the coin heading into price discovery once again.
LUNA/USDT
$78.22 is a key level for Luna, a previous all time high that failed to hold as support on the market correction. The coin is currently working on flipping that level back to support. I would be looking for a back test there for a potential entry, assuming you believe that the market bottom is in and that crypto is heading up. If Bitcoin dumps, that level is HIGHLY unlikely to hold. The market is shaky, so you have to decide for yourself whether it’s worth the risk to take a shot at alts right now.
The blue 50 MA right below that area is another potential entry if you get a wick below support.
Target is the recent all time high at $103.6.
SOL/USDT
This is the “SOL PRICE” that we care about, right?
During Chartapalooza yesterday, I shared this idea, saying that I wanted to see $148.04 flipped from resistance to support. That has happened, almost to the dollar. Next target is $177. Stop below the recent lows, if you are trading this. Size your position accordingly.
Again, this is risky an entirely dependent on what Bitcoin does next.
On-Chain Signs Of Conviction - IntoTheBlock
In this report, we bring to you the latest in on-chain cryptocurrency analysis. We look at the blockchain directly and analyze balances, transactions, and the overall activity of market participants. This gives us a unique insight into the future of the market.
This section is written in conjunction with IntoTheBlock (ITB).  ITB is an intelligence company that leverages machine learning and advanced statistics to extract intelligent signals tailored to crypto-assets. IntoTheBlock tackles one of the hardest problems in crypto: to provide investors with a view of a crypto asset that goes beyond price and volume data. 
The Wolf Den research team uses IntoTheBlock to dig deeper and get the most important insights about the crypto market.
On-Chain Signs Of Conviction
Following a drop of over 40% in price, Bitcoin long-term holders remain unfazed. The number of hodlers — addresses that have been holding for over one year — continues to grow in spite of the volatility.
As it recently surpassed 24 million addresses, the number of BTC hodlers has managed to grow consistently regardless of price action. This shows high conviction from long-term players, not panicking in moments of volatility.
Similarly, on-chain flows suggest bullish activity picking up, particularly relating to funds flowing out of centralized exchanges. Exchange flows have become an important tool to gauge investor positioning for a particular crypto-asset. This is the case as inflows into exchanges tend to increase prior to or during price crashes, a signal that holders may be depositing with the intention to sell.
Conversely, outflows from centralized exchanges suggest buying activity. This is the case as holders wish to have their crypto-assets stored safely in a hard wallet or into a decentralized application where they can earn a yield on top of their assets.
Netflows are inflows minus outflows. Therefore, negative netflows point to a high amount of outflows relative to inflows.
On Tuesday, as Bitcoin dropped below $40,000 and quickly recovered, a net amount of $1.25 billion worth of BTC left centralized exchanges. This was the largest outflow of BTC in over a month and can be interpreted as bullish, suggesting that holders are leaving exchanges for more secure or yield-generating locations.
Zooming out, with the Global In/Out of the Money (GIOM), which covers all addresses holding Bitcoin, the image is indeed optimistic.
In this case, 65.59% of all Bitcoin addresses are “in the money,” or holding positions with unrealized gains. By looking at the full picture, selling pressure from recent buyers seems less severe, with most long-term holders comfortably profiting.
Overall long-term indicators show high conviction from long-term investors.
Chart Requests
Every Wednesday I take requests from paid subscribers and chart them on a livestream - Chartapalooza. Here is yesterday’s stream - enjoy!
Find The Next Gem | Bitcoin & Altcoins Price Analysis | Chartapalooza
Control Your Emotions
Emotional control is everything for a trader. The worst mistakes in trading are made when emotions take over, similar to how poker players often make poor decisions when they go “on tilt.”
Here are 4 quick tips for controlling your emotions as a trader.
1. TAKE A WALK
Even if it’s just for a minute.
Given the fast and furious nature of day trading, it is too easy to get trapped in the sea of emotions.
Walking away from your trading screen is a deliberate break in your trading tempo. It is a physical action that you take to control your mood. This simple act clears your mind and reminds you that you are in control.
Listening to music also helps to detach you from the market.
The market does not drag you into a trade. Quite the opposite. You can walk away from the market any time you want. You are in control.
2. STOP TRADING AFTER THREE CONSECUTIVE WINS OR LOSSES.
Three consecutive wins make you feel like a super trader. You think that you cannot lose. You are invincible. You over-leverage and over-trade.
Three consecutive losses make you feel like a loser. You don’t want to lose. Your emotions explode. You revenge trade.
3. DON’T LOOK AT YOUR PROFIT AND LOSS WHILE YOU ARE TRADING.
I can hardly think of a figure that causes a greater surge of emotions than your profit and loss. To many traders, the profit and loss figure is an expression of their self-worth. (Nope. You are greater than just your profit and loss.)
4. ASK YOURSELF: “AM I SCARED?”
Fear is an intense and destructive emotion that traders often encounter.
  1. When you are watching your trades unfold, keep asking yourself: “Am I scared?”
  2. At any point, if you answer “Yes,” Exit immediately.
  3. Review your trading rules.
  4. Reduce your trading size.
  5. Repeat.
Control your emotions, control your trades.
Bill Proposed To Limit CBDC
U.S. Congressman Introduces Bill to Limit Fed’s CBDC Powers - Crypto Briefing
Congressman Tom Emmer has presented a bill that would prevent the FED from issuing a CBDC to individuals. The argument is that a CBDC does not “represent American ideals.” Emmer has long been a supporter of the crypto community, with a focus on the rights of an individual to privacy. Here is his argument for limiting a central bank digital currency.
“As other countries, like China, develop CBDCs that fundamentally omit the benefits and protections of cash, it is more important than ever to ensure the United States’ digital currency policy protects financial privacy, maintains the dollar’s dominance, and cultivates innovation. Simply put, we must prioritize blockchain technology with American characteristics, rather than mimic China’s digital authoritarianism out of fear.”
Turks Using Crypto As Inflation Hedge
Turks Traded $1.8B in Crypto Amid Lira Crash During Q4 2021 - BeInCrypto
Turkey is experiencing high inflation, and citizens are looking for places to hedge and protect their hard earned money. Crypto is the natural place, and trading volumes support this thesis. Importantly, we all love to make the case for BTC as the best inflation hedge, but Turks are largely looking for access to dollars in the form of USDT - a great hedge against the Lira and one that is more usable day to day.
Crypto can solve problems for people across the world - we are seeing it in action.
Politicians Beat The Market
unusual_whales
🚨BREAKING NEWS🚨

I have just released the full trading report on politicians in 2021.

In short, many beat the market.

They traded more than ever before.

And they made numerous unusually timed trades, resulting in huge gains.

Read it here: https://t.co/CQ6JphecwZ https://t.co/ra9DEjV0ok
Either politicians are among the 5% of human beings that are talented traders that can beat the market, or there is something more nefarious going on here.
The case is for the latter, with politicians using inside information to make successful trades, both on stocks and options. Read the thread, judge for yourself.
The Wolf Of All Streets Podcast Ft. Justin Kan
Podcast - The Wolf of All Streets
As a young entrepreneur, Justin Kan dreamed of making one million dollars off of his video streaming platform called Twitch. Never in his wildest imagination did he suspect Amazon would acquire his company for a billion dollars just 7 years after launch. Now Justin is considered one of the greatest thought leaders navigating Web 3.0, the metaverse, and NFTs. This future-looking episode covers a wide variety of big ideas that seem far-fetched but are actually unfolding behind our screens at this very moment.
In this episode with Justin Kan, we discussed:
  • What’s Behind Web 3.0?
  • Decentralization Is Give And Take
  • Why Build In Crypto?
  • Twitch On Web 3.0
  • What Is Justin Kan Building?
  • What’s The Future Of The Metaverse?
  • Are Metaverse Games Ready?
  • Web 2.0 —> Web 3.0
  • Advice For Entrepreneurs
  • What Is Fractal’s Plan?
  • Security Laws In The Metaverse
  • NFTs Are The Future
This episode is sponsored by: ARCULUS and BULLISH.
My Recommended Platforms And Tools
This is where I trade with leverage and can also trade spot with no fees.
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
Mining for everyone! You can buy an ASIC and have it set up at a destination of your choice by them, and you only pay the electricity cost. Absolutely awesome.
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.
Subscribe to my YouTube channel for free daily content.
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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