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The Wolf Den #481 - The Inflation Contagion

April 19 · Issue #481 · View online
The Wolf Den Crypto Newsletter
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Your silver has become dross, your wine mixed with water. Your rulers are rebels, friends of thieves - (Isaiah 1:22).
In 750 B.C., the prophet Isaiah warned the people of his kingdom of widespread corruption that was threatening to tear society apart. It was his belief that sin was the root cause of the problems. The rulers were criminals, jewelers were debasing the currency, and winemakers diluted the wine.
Society was in shambles.
We are thousands of years beyond Biblical times and are experiencing eerily similar problems to those that Isaiah described above. Our rulers (politicians and central bankers) are tearing apart the fabric of modern society through money printing.
I want you to imagine a winemaker in 2022. He takes pride in the grapes he grows and the detailed process used to perfect his product. His only concern in life is to make the best wine in order to provide for his family. By working hard and honing his craft, our winemaker reasonably prices his product and maintains a loyal customer base. But one day, a small powerful group of elites decides to drastically increase the money supply.
Our winemaker begins to notice the cost of supplies going up. Irrigation, bottles, and barrels are all costing more, enough to put a strain on his bottom line.
Our winemaker must do something or he won’t be able to provide for his family. He brainstorms three options.
Option A: Work harder and produce more wine to cover the costs.
Option B: Raise his prices at the expense of losing customers.
Option C: Dilute the wine by just enough to make up for the increase in costs.
Inflation has forced the winemaker to sacrifice his time, business, or morals to protect his family. This is the contagion of inflation. The decision to expand the money supply has serious trickle-down effects. Should the winemaker work twice as hard for the same results? Should he raise his prices and risk losing business? Or should he dilute the wine and hope that nobody notices?
Inflation infects everything, much like it did in Biblical times. Our kingdom is no different.
Imagine the barbers who are forced to decide between the quantity and quality of their cuts. Or the accountants who no longer have time to uphold the best practices needed for every client.
The problems caused by inflation run deep.
Central bank policy has brought this disease to our nation and we are all feeling the effects. Like a virus, inflation is a contagion eating away at the health of our economy. A virus that none of us can escape.
In This Issue:
  1. The Inflation Contagion
  2. Bitcoin Thoughts And Analysis
  3. Altcoin Charts
  4. BTC Vs. XBT
  5. The Spot BTC ETF Will Come
  6. Ethereum Foundation Reveals Balance Sheet
  7. The Wolf Of All Streets Podcast Ft. Catilin Long
  8. My Recommended Platforms And Tools
Bitcoin Thoughts And Analysis
Beautiful move to hold local support yesterday, with the wick below and close well above. Just what we were looking for. Further, yesterday’s candle was bullish engulfing. Now we have a small local range and want to see price above $41,557 to really confirm that things are likely to continue looking more bullish. We want to see some follow through now that we bounced.
The oversold bullish divergence played out beautifully, as it usually does. So now what?
We have potential hidden bearish divergence forming (red) and need to see a 12 hour close above $41,147 to invalidate. If the candle closed right now, I would NOT consider this a confirmed divergence, because there is no clear elbow down on RSI. The daily has the same potential div, so this is worth watching today.
Yesterday’s big bullish engulfing 4-hour candle was the highest volume 4-hour candle on Bitstamp in a month. That is very encouraging, as it shows that there was real demand. Price also stopped exactly at the top of the channel that I shared yesterday and appears to be consolidating against that resistance. We want to see a strong push on volume.
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.
Did I think this chart looked very bullish? Yes. Did I expect GMT to go up? Yes. Did I think it would go up this much in one day after sharing the chart yesterday? No.
Massive move from GMT, breaking through every resistance, including the all time high. The next trade on a chart like this is a retest of the previous all time high as support and then a move into price discovery… which already happened an hour before I sat down to write this.
Bulls are looking for this to consolidate above $3.13.
I hope you caught this at some point on the way up.
No other coins are jumping out at me at the moment.
Exodus | Crypto News and Insights
People often ask me what XBT is.
XBT is interchangeable for BTC - it is just another ticker abbreviation for Bitcoin. Some platforms are beginning to abbreviate BTC as XBT. There is no central authority so any abbreviation is fair game. XBT comes from the ISO (International Organization for Standardization). In their practice, an “X” is added before any currency that is non-sovereign. Hence XBT, XAU, or XAG.
The Spot BTC ETF Will Come
Grayscale CEO: Spot Bitcoin ETF Is A Matter Of When, Not If - Bitcoin Magazine: Bitcoin News, Articles, Charts, and Guides
According to Grayscale’s CEO Michael Sonnenshein, “it really is, in our opinion, a matter of when and not if the SEC approves a spot bitcoin ETF.” The article above goes into detail about the technicalities of approving an ETF.
Sonnenshein is making the obvious argument that the SEC has no legal grounds to keep denying a spot Bitcoin ETF. Considering the amount of junk ETFs that already exist and the fact that gold has leveraged ETFs and Bitcoin has its own futures ETF, it also seems certain to me this is a matter of when not if.
Ethereum Foundation Reveals Balance Sheet
Ethereum Foundation Releases First Report, Reveals Treasury Holdings
For the first time in history, the Ethereum foundation has revealed its treasury holdings to the public. To nobody’s surprise, 99.1% of the foundation’s crypto holdings were in Ethereum. The report showed that the foundation manages $1.6B in total and $1.3B of the total is represented by crypto. Their money is where their mouth is, which is a good sign. The report also covered a number of other important topics, such as their philosophy and how they support the Ethereum ecosystem. I suggest you check out what they are up to if you are an Ethereum investor.
The Wolf Of All Streets Podcast Ft. Caitlin Long
Podcast - The Wolf of All Streets
There’s a BIG fight coming between the Crypto industry and regulators. Is Crypto ready to put up a good fight? Our guest today, Caitlin Long (@CaitlinLong_), explains that this fight has a lot riding on the U.S. Dollar. Caitlin is the founder and CEO of Custodia Bank and Bitcoin advocate since 2012. She joins us today to discuss potential threats to your bank account, why money is really just a game of confidence, how voluntary Bitcoin usage benefits the industry, and the essential role of regulators moving forward.
In this episode with Caitlin, we discussed:
  • About our guest Caitlin Long
  • Bitcoin Miami 2022: a hacker’s paradise
  • Custodia Bank and the fight over the US dollar
  • Regulation concerns
  • Threats to your bank account
  • Elizabeth Warren’s intentions
  • Money is a game of confidence
  • Understanding sanctions
  • Lessons from visiting Russia
  • El Salvador doubling down on digital gold
  • Voluntary Bitcoin usage
  • Stablecoins vs Bitcoin
  • Silent billionaires
  • The worst-case scenario
  • The SEC’s new crypto crackdown
Thanks to our sponsors VAULD and VUORI.
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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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