View profile

The Wolf Den #482 - Value Vs. Price

April 20 · Issue #482 · View online
The Wolf Den Crypto Newsletter
This newsletter is sponsored by Bitget! Bitget is the best crypto exchange for both spot and leverage, world’s largest crypto copy trading platform, and the official partner of Juventus Football Club. They are offering my subscribers up to a $3,000 bonus for signing up. They are also offering 100 BGB to any Wolf Den reader who opens their first trade on Bitget until April 30th, as well as a 15% discount on trading fees!
There’s a famous rule of investing: it doesn’t matter what you buy, it matters what price you buy it at.
Anyone who has made money on a shit coin can attest to this. Nobody can convince me that Will Smith Inu has any real value. Maybe there is a die-hard maxi out there that feels otherwise, but I’m not changing my mind. If you bought it at the right moment and unloaded your position, then you made money, because you bought it at the right price.
But that does not mean it has value.
Bitcoin’s price may be dropping, but I believe it is actually becoming more and more valuable over time. Value is not the same as price. 
The most important distinction between price and value is the fact that price is arbitrary and value is fundamental. Consider a person selling gold bars for $5 apiece. The price of those gold bars is, in this instance, $5. It’s an arbitrary amount chosen by the seller for reasons known only to them. Yet, in spite of the fact that those gold bars are priced at $5, their value is much more.
Side note, if anyone knows a sucker selling gold bars for $5, please send me his number.
This happens often in the stock market. The examples may not be as immediately noticeable as $5 bars of gold, but they are often quite extreme in their own right. The price of a stock is determined by a list of factors that it would take years to understand. Many of these factors are driven by human characteristics and emotions, such as fear and greed, market tendencies, and events so distantly related that trying to unravel the correlation between those events and the stock’s price would make your head spin. All of these things affect the price of a stock, sometimes to a large degree. But rarely do they significantly affect its value.
That is why one of my favorite trades is buying an irrational dip on a specific asset when the entire market drops - finding the baby that was thrown out with the bathwater. One of my favorite personal examples was buying Netflix the day after Brexit was announced. The entire world panicked and stocks dropped across the board. I was looking for an entry on Netflix, and my position was that it was not worth 15-30% less 24 hours later because of a vote in the UK that was going to take years to play out.
The stock was back to it’s pre-Brexit price just days later.
The good news for investors is that an asset’s price almost always levels back out with its value. This truth is the one that investors such as Warren Buffet have used to make billions. Investors study value, not price.
The value of Bitcoin usually exceeds its price for a variety of reasons, many of which are finally gaining traction in the mainstream narrative - digital gold, store of value, deflationary, hedge. To those who understand monetary policy and the dangers of Central Bank activity, Bitcoin has always held potential value far exceeding the current price. That’s why billionaires and corporations are seeking exposure - even if Bitcoin were to drop in price, its potential value as the saving grace of an entire portfolio due to its idiosyncratic risk is dramatically understated and therefore worth the risk.
Bitcoin’s true value still has a long way to go before it is properly priced in.
Value is everything.
In This Issue:
  1. Value Vs. Price
  2. NFTs Show No Signs Of Slowing Down - IntoTheBlock
  3. Bitcoin Thoughts And Analysis
  4. Altcoin Charts
  5. Legacy Markets
  6. Australia Opens The Flood Gates
  7. Bitcoin Whale Wakes Up
  8. My Recommended Platforms And Tools
NFTs Show No Signs Of Slowing Down - 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.
No signs of slowing down
Non-fungible tokens (NFTs) have burst into the mainstream and they are showing no signs of slowing down. Analyzing on-chain and market data obtained by the new NFT release at IntoTheBlock, we obtain fascinating insights behind the remarkable rise of NFTs and their impact on the Ethereum blockchain.
Although it is unclear if demand is coming from people looking to collect NFTs or simply from speculation on JPEGs (and even .txt files!?), it is evident that investors cannot get enough.
Early? - Over 3.45 addresses have bought at least one NFT, growing 100x year over year.
  • Although it may seem like a big amount, it only represents 4.67% of the total addresses with a balance in Ethereum.
  • The number of addresses holding NFTs has grown by 1.2m in 2022.
The volume spent per address has also grown exponentially. The total volume traded by NFTs indicator shows the accumulated volume that has been traded only in NFTs.
18 million - The accumulated volume traded in NFTs has recently surpassed the 18 million ETH mark with an aggregate volume of over $54 billion
  • 2022 has represented the majority of the volume, increasing by 4.5x in the first 4 months of the year.
  • The pace has accelerated since February, as the number of collections increased considerably as well.
While a significant portion of the activity appears to be speculative following price increases, it is likely that there is substance behind the space as it drives more users and savvy investors into crypto.
Bitcoin Thoughts And Analysis
Posting this as a quick reminder of the key levels, which have not changed.
As you can see, the week started down but, as I mentioned, was likely to see a nice reaction around $39,600. Price was below it when I said that, and for now we are holding above. Lots of week left, too early to celebrate, but for now this weekly candle looks promising.
Little has change here. Bitcoin continues to push against local resistance at $41,557. Breaking through this and closing a daily candle above should send price back to $42,000 (obviously) but then $45,500.
This is AT RESISTANCE, so we need to see a push or else this move could fade away as most have before.
Price broke out as I hoped, after consolidating below the top of the descending channel. Things are looking decent for Bitcoin.
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.
This is AT RESISTANCE at $80.44, so for me this is not the time to consider buying…. yet.
Traders should be watching for a break of that level and ideally a retest as support, before targeting the key resistance just below $100. As you can see in the circled area, 5 candles failed to break that resistance last time price reached it, so you can expect it to potentially be a tough nut to crack.
But first $80.44…
Price is trading in a local descending channel with alternating touches up and down. This is NOT a bear flag, which would have to be ascending at the bottom of a move like this. It is also NOT a bull flag, which would be a descending channel but at the TOP of a move.
Either way, a descending channel should statistically break to the upside. We just saw something very similar on Bitcoin. See here:
Legacy Markets
Carnage. The chart looks bad, right? Now look at the purple line around $257, because that’s where Netflix is currently priced after hours, representing a 25% dump after reporting earnings.
Remember when the greatest criticism of Bitcoin was that it was too volatile? In the past months, we have seen some of the biggest companies in the world erase 25% or more of their market cap in a matter of minutes after hours… while retail traders have zero access to their accounts or the ability to sell.
Bitcoin has never dropped 25% in a matter of minutes, and everyone ALWAYS has the ability to exit or enter a position. 24/7/365.
All of that said, if you are a Netflix believer, this could be an overreaction and the chart is going to have a MASSIVE gap to fill. It will be a breakaway gap, which is less likely to fill than others, but still a trade that many would take.
For more on gaps, I wrote this article for CoinTelegraph.
Mind the Gap: Identifying and Trading 4 Different Bitcoin Chart Gaps
For more information on the slaughter of Netflix…
Netflix shares crater 25% after company reports it lost subscribers for the first time in more than 10 years
Australia Opens The Flood Gates
Australia’s First Bitcoin ETF To List Next Week: Report - Bitcoin Magazine: Bitcoin News, Articles, Charts, and Guides
Good news for Australian crypto investors! Starting next week, the Australian Securities Exchange is listing its first spot Bitcoin ETF through Cosmos Asset Management. Contrary to what investors were expecting, Australia’s first ETF will actually invest in shares of Canada’s Purpose Bitcoin ETF rather than Bitcoin directly. Not ideal for institutional investors, but still much better than a futures-based ETF. Since Cosmos received approval, it has been reported that other asset management firms are also trying to secure their spot ETF, including VanEck Australia, BetaShares, and Monochrome Asset Management.
Bitcoin Whale Wakes Up
Mysterious Bitcoin Whale Accumulates Over $117,000,000 in BTC in Just One Week - The Daily Hodl
The third-largest Bitcoin holder in the world (not counting exchange wallets) just added 2,822 BTC to their stack over the past 7 days. With this new addition, the wallet currently holds just shy of $5.2B for a total of 125,252 BTC. If you want to track the whale’s wallet, you can do so HERE and see all of their moves in real-time. If you take a look, this whale was selling a small percentage of their stack back when Bitcoin hit $67,000 in November. A good indication of a recovering market is when whales start buying. A continuation of this activity is a strong signal.
My Recommended Platforms, Tools And Podcast Sponsors
Proud sponsor of The Wolf Den Newsletter. The world’s biggest crypto copy trading platform, up to a $3000 bonus for signing up.
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.
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 most comfortable clothing on the planet, so much so that I went out of my way to ask them to be a sponsor after pushing them endlessly on my YouTube streams! Seriously, these are my favorite clothes. Whatever you are wearing right now is less comfortable than Vuori.
I have chosen Bullish as a sponsor for both my podcast and livestreams! They are an awesome exchange that incorporates all of the benefits of both centralized and decentralized exchanges. Your keys, your coins, but with a robust order book, complex orders and deep liquidity.
Vauld are sponsoring both my podcast and livestreams and have become my personal platform of choice for holding coins and earning yield. I love their rates (12.68% on Stables and 6.7% on BTC and ETH) and their buy the dip feature that automatically buys for me when price drops.
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.
Did you enjoy this issue?
In order to unsubscribe, click here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue