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The Wolf Den #480 - Narratives

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April 18 · Issue #480 · View online
The Wolf Den Crypto Newsletter
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Fundamentals are important for investors. Understanding the underlying value and speed of adoption of an asset you are invested in helps maintain conviction.
Many people conflate fundamentals with narratives, but they are not the same.
By now, you likely know where I stand on narratives and Bitcoin. I solely trade the chart when it comes to Bitcoin - I don’t pay attention to narrative, because I have seen time and time again that these “events” do not move the market. Chinese New Year, Wall Street Bonuses, Tax Returns, STIMULUS CHECKS - these were all supposed to massively impact Bitcoin price. These narratives are all cut from the same cloth - conjecture, speculation and hopium.
Narratives in the crypto space are like miracles in religion - they give people a reason to justify things that they cannot explain. They need a story to give them an excuse for their losses, or to make them feel brilliant if price goes their way.
We have all seen it - everyone screams MANIPULATION! when they lose money. This generally happens when they are on the wrong side of a significant move. There has to be a reason, be it the Fed, a whale selling to cover margin calls in the stock market, China banning crypto or bitcoin loving unicorns flying in from Djibouti to steal our coins.
People always seem to need answers for why things happen.
The simple fact is, you losing money does not mean that a force is conspiring against you. It just means you lost. You don’t need an outside explanation - you just need an idea for the next trade.
Blaming outside forces for your losses is just your inability to accept that a loss is your fault. You are personally accountable for your losses. You should understand the risks of trading any market that you choose to participate in. If you need a narrative, then you are likely too emotional or unstable to be an effective trader.
You cannot predict the future and you cannot control what happens with price. All you can control is how much you lose when you are inevitably wrong.
Bitcoin is a free market, largely unaffected by narrative (for now). There’s a buy order for every sell order. Large players moving the market with their orders is not manipulation - it is a key facet of the free market. They just happen to have more money than the rest of us. It’s your job to do what they do and not be their prey. It’s that simple.
Bottom line - if you think the market is manipulated, don’t put your money in it. If you need a narrative to explain why price does what it does, you may not be cut out for this.
Take what the market gives, accept your fate, claim responsibility for the outcome and move on to the next opportunity.
Or skip trading entirely and just HODL. That works every time.
In This Issue:
  1. Narratives
  2. Bitcoin Thoughts And Analysis
  3. Altcoin Charts
  4. Legacy Markets
  5. Twitter Prepares To Swallows The Poison Pill
  6. 170 Aussie Convenience Stores Accept Crypto
  7. Dallas Cowboys Go Crypto
  8. My Recommended Platforms And Tools
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Bitcoin Thoughts And Analysis
I am still charting on a small laptop and will be for the next week. That is why my charts look smaller and there have been less of them.
WEEKLY CHART
Not much has changed on the weekly chart.
But here’s something really interesting. We now have 3 weekly red candles in a row. This does not happen particularly often. It never happened during the bear market in 2021, even as Bitcoin dropped from 65K to 28K and consolidated for an entire summer.
What’s more rare? 4 in a row. In fact, the last time we had 4 weekly down candles in a row was October… of 2019.
Bitcoin is due relief, and I think this could be the time that we start to see it, for a variety of reasons.
The weekly held support at $39,600 before breaking below to start the new candle. Not ideal, but there’s an entire week left to close back above and hold as support. The next area of support below is between $37,700 and $38,400 or so. Today’s candle already almost touched that area.
We can judge the weekly properly next Sunday.
DAILY CHART
Bitcoin continues to hold the higher low for now.
$39,218 is worth watching on the daily close today, as price was chopping sideways and that was the low. Closing above on the daily would give a small hint that liquidity has been found below this level and price is ready to head up. A close below and we have local support broken.
There is also potential bullish divergence with RSI on the daily, and every time frame below.
12-HOUR CHART
We have potential bullish divergence with RSI on the 12 hour chart, coming out of oversold. This is my favorite setup, so worth watching. It has confirmed on the 6 hour and 4 hour already, although over a long time period than is ideal. If we see price rise in the next 12 hours, this will confirm with a clear elbow up on RSI.
My favorite long setups are when we see bullish divergence confirming across multiple time frames, like dominoes. That could happen here. If 12 hour confirms, we will have every time frame up to 12 and then the daily will be in play.
With this in mind, it is becoming increasingly likely for me that the local bottom is in. If I was actively trading this, which I am not because I am not home at my trading desk, I would be long already on the 4 and 6 hour closes.
4-HOUR CHART
As you can see, price broke support at the blue line, which is not ideal. However, we now have a likely descending channel, not really confirmed because there are not 2 alternating touches both up and down, even though there are 2 touches on each the top and bottom.
Still the idea is there, and a descending pattern should eventually break up.
Remember, price can still go down and visit support lower or this could become invalid, but this adds come confluence to the divergences.
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.
GMT/USDT
Since launching, GMT has been arguably the most bullish asset in the crypto ecosystem, even as Bitcoin has dropped and alts have underperformed. That means it is always worth watching. I own this asset and intend to hold it for quite a long time and am not actively trading it.
There is no particular setup here or a reason to buy at this precise moment. Rather, I wanted to share a chart with key levels for traders and show that this appears to be bullish consolidation and reaccumulation. As you can see, price topped around $3.12 before dropping and starting to range. It also appears to be rounding out, which could lead to a nice cup and handle… but this would require price to make a move up to $3.12 again and then form a bull flag below that resistance before breaking up for a huge move. Purely an idea and not tradable for now.
The next move would be to trade a flip to support of the $2.64 area, targeting the recent all time high. A break of that high would send this into price discovery.
For now, price is floating between two levels, so nothing to do yet but watch this asset for another bullish move.
Legacy Markets
This is going to be a big week for earnings in the stock market. I was unable to embed the article that I was sharing, so here is the text from Nasdaq.
“U.S. stock futures are moving lower in early morning trading ahead of this week’s opening bell. This seems to be the case despite the first-quarter earnings season continuing to pick up momentum this week. In the week ahead, investors will likely be tuning in to some industry-leading firms across the board. This includes but is not limited to the likes of Netflix (NASDAQ: NFLX), Tesla (NASDAQ: TSLA), IBM (NYSE: IBM), and Nucor (NYSE: NUE). Now, it is important to note that all this is happening while inflation continues to weigh in on the stock market. Evidently, we can see this from last week’s mixed bag of earnings from big banks such as JPMorgan Chase (NYSE: JPM) and Wells Fargo (NYSE: WFC). Because of this, investors could be turning towards market analysts before making moves this week.
Providing insight into the overall earnings season ahead is Raymond James’ (NYSE: RJF) Institutional Equity Strategist, Tavis McCourt. He writes, “Our belief remains that 2022E EPS likely comes down a bit through earnings season, but likely less than we would have thought a month ago. And the more U.S.-centric and more services-centric the company, the better the EPS outlook is likely to be.” Nevertheless, companies will likely have to bring their A-game to the table this earnings season to impress investors. As of 5:24 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading lower by 0.34%, 0.55%, and 0.76% respectively.”
Twitter Prepares To Swallows The Poison Pill
Twitter board of directors responds to Musk's takeover offer with a defensive plan
In an attempt to make Elon Musk’s acquisition as difficult as possible, Twitter’s board of directors has resorted to one of the oldest and deadliest tricks in the book - the “poison pill.” Known as a “limited duration shareholder rights plan” or “rights plan” for short, the device is designed to protect the company from a hostile takeover. But it comes at a cost.
Swallowing the pill is like a cheap insurance policy. It is effective at slowing down unwanted aggressors but dilutes the shares of the company in the meantime. As the aggressors buys more shares, the company simultaneously issues more stock at a discount to current shareholders or anyone other than the aggressor. It’s a race to the bottom, a quick way for a company to shoot itself in the foot before being captured. 
In Twitter’s case, the plan enacted is effective for one year and only exercisable if an entity (Elon Musk) acquires 15% or more of the stock. Supposedly, the pill gives the board more time to look out for shareholders but we all know that’s a bunch of BS.
It’s hard to see this ending well for Twitter. Lawsuits, freedom of speech, and fair markets are now in question.
More to come.
170 Aussie Convenience Stores Accept Crypto
Aussie Convenience Store Giant Allows Cryptocurrency Payments Across Its 170 Outlets | Bitcoinist.com
“There’s a current plan for On The Run (OTR) convenience store and gas station giant to include cryptocurrencies as part of its payment options. This plan will cut across 170 outlets of the company throughout South Australia and Victoria. With this plan, customers can make payments with more than 30 cryptocurrencies for snacks, gas, and Sunway foot long.
Peregrine Corporation, the OTR’s parent firm and one of the largest Couth Australian private companies, will not be left out. The firm will also accept crypto assets at Subway, Smokemart stores, and Oporto. By finalizing the plan in July, the company will become the largest in the country to adopt crypto payments for in-store.
To implement its plan, the company is partnering with Crypto.com, a crypto exchange based in Singapore. The crypto exchange will flag off the Pay Merchant as the company’s settlement layer.
Furthermore, a Sydney-based payment system provider, Datamesh, is expected to install some Point-of-Sale terminals. Such terminals will provide payments points for customers using the crypto holding through Crypto.com.”
Another major step towards mainstream adoption.
Dallas Cowboys Go Crypto
Dallas Cowboys’ partnership with Blockchain.com signals more mainstream crypto exposure – TechCrunch
The specific details of the deal have not been released according to NFL policy, but this is reported to be a long term deal between blockchain.com and the Cowboys. The NFL is extremely particular about sponsorships they approve, so this is a signal that exchanges, at the very least, will be able to work directly with NFL teams.
This is not a deal for naming rights of the stadium, but rather for creative strategies to promote the brand and crypto.
This is huge.
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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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