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The Wolf Den #486 - The Trader's Trap

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April 26 · Issue #486 · View online
The Wolf Den Crypto Newsletter
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Traders and investors share a common blind spot. This trap eats away at the very thing that matters most - profitability.
Strong opinions could be your financial downfall and they are irrelevant in trading.
In today’s 24/7 digital landscape, opinions are amplified dramatically and often skinned as fact. You can be a young conservative, fiscally progressive, prefer Jordans over Adidas and think that Endless Love is the great movie of all time and still easily find like-minded individuals. You can also find people who vehemently disagree or think that Endless Love was an overdramatic chick flick. Everyone has an opinion on everything.
Next time you’re in a taxi or a barbershop, ask for an opinion on COVID, inflation, interest rates or Ukraine. Opinions are cheap , but holding on to them as a trader can come at a steep cost.
As the famous adage goes - “Opinions are like assholes. Everybody has one.”
Within a sea of opinions, traders and investors face a tough choice. To be right or to be profitable.
There is a time and place where being right matters. But trading isn’t like electing an official, measuring sugar for a soufflé or following the law. Being right as a trader doesn’t matter much at all. A good trader can be wrong 7 or 8 times out of 10 and still make a living by managing their position properly - small losses cut early, big wins that require patience. This is the result of caring about being profitable, rather than being right.
We have all seen traders on twitter that are publicly bullish or bearish and emotionally tied to their positions. They refuse to adapt when price goes the other way, because they have publicly planted their flag and refuse to admit that their prediction failed. They lose money because they are afraid to pivot publicly. It’s hard enough to trade successfully as an individual, but nearly impossible with an audience.
Being a good trader is all about being flexible. That means following your system, managing your trades appropriately, and following your thesis until it is invalidated. Don’t get caught in up in a web of opinions.
Many traders will blow up their portfolio waiting to be right. Don’t be that guy.
In This Issue:
  1. The Trader’s Trap
  2. Bitcoin Thoughts And Analysis
  3. Legacy Markets
  4. Elon Musk Strikes A Deal
  5. Instagram Hacker Steals Bored Apes
  6. The Wolf Of All Streets Podcast Ft. Jimmy Song
  7. My Recommended Platforms And Tools
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Bitcoin Thoughts And Analysis
DAILY CHART
Bitcoin is right back in the local range between $39,218 and $41,557. This played out just as we hoped, with price wicking below the bottom line and then closing back above, There is clearly a ton of demand below the bottom line and a ton of selling interest above the top line.
This exact thing happened last week as well. A drop on Sunday, rip on Monday, both with bullish divergence on multiple time frames.
We now have confirmed bullish divergence on the daily chart. This should mean that a bottom is in or building for now. I would have preferred RSI to reach oversold first, but that does not mean that the idea is invalidated,
12-HOUR CHART
As I mentioned yesterday, I thought the bottom was likely in. We had bullish divergence on lower time frames with a very likely bull div on the 12 hour and daily forming. Interestingly, we had the exact same thing last Sunday, as you can see from the vertical lines.
Two times is not enough to draw any conclusions, but worth noting as we head into the weekends.
Legacy Markets
DXY (DOLLAR INDEX)
The dollar continues to show incredible strength vs. other currencies, as reflected on the DXY chart. DXY is usually inversely correlated to stocks and other assets, the more this rises the more pressure will be on markets.
The dollar is going up because people expect the Fed to continue to raise rates and continue it’s hawkish stance. When this happens, people sell their assets into dollars and accumulate cash. Further, profit taking after a historic run in assets is into dollars.
The truth that most Bitcioners never want to hear is that the dollar is still viewed as the main safe haven when things get ugly. People all over the world want to get their hands on greenbacks.
Technically, this looks like its a rocket ship to 102.992. If it breaks above that, the next resistance levels are significantly higher.
Elon Musk Strikes A Deal
Musk gets Twitter for $44 billion, to cheers and fears of 'free speech' plan | Reuters
Elon Musk’s bid to purchase twitter was successful, and the world’s richest man can now meme endlessly without fear of reprisal. Assuming regulatory approval, Elon Musk is now the owner of Twitter. At a price of $54.20 per share, the company is going private at a total cost of $44B.
Pocket change.
Since Musk’s acquisition spree began , $TWTR has risen from a low of $31.30 to nearly $52, representing a whopping 65% increase. Detractors aside, the free market seems to approve of Musk owning Twitter. 
Below is a quote from Musk.
Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vitals to the future of humanity are debated. I also want to make Twitter better then ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating spam bots, and authenticating all humans. twitter has tremendous potential - I look forward to working with the company and community of users to unlock it.
I hope that even my worst critics remain on Twitter, because that is what free speech means.
Instagram Hacker Steals Bored Apes
Bored Ape Yacht Club Confirms Instagram Account Was Hacked, Here Is How It Happened
Millions of dollars in NFTs were stolen in a matter of moments when the official Yuga Labs Instagram account was hacked and fake links were distributed. The hackers used the account to announce a fake airdrop, and users were lured into signing a transaction that allowed the hackers to empty their wallets. The Instagram account is now recovered, but the funds likely never will be - 91 NFTs in total. This is what the team at Yuga Labs said about the hack.
“We will also NEVER announce mints on the BAYC or Otherside Instagram accounts first, ever. Only obtain information from our official twitter accounts: Bored Ape Yacht Club (@BoredApeYC), Yuga Labs (@yugalabs), and @OthersideMeta. These will be crossposted on the announcement channel of BAYC Discord.”
*I think the key is cross-referencing and confirming signatures before signing.
The Wolf Of All Streets Podcast Ft. Jimmy Song
Podcast - The Wolf of All Streets
Decentralization is not always the right answer. Saving in fiat is setting yourself up for failure. And you get in at the price you deserve. These are just a few nuggets from this absolute gold mine of an episode with Jimmy Song (@jimmysong). Join us for our discussion at Bitcoin 2022 where we talked altcoins, ETH 2.0, CBDC, regulation, and the political conversation surrounding Bitcoin.
In this episode with Jimmy Song, we discussed:
  • What to expect with our guest Jimmy Song
  • Bitcoin 2022 and the adoption curve
  • Altcoins are bad for Bitcoin
  • Cryptocurrencies are a PR problem
  • People are opting out of mainstream media
  • Pumping altcoins and the problem with incentives
  • Crypto innovations are dependent on printing money
  • Decentralization doesn’t always win
  • A single point of failure = regulation
  • ETH 2.0
  • Central Bank Wet Dream
  • Bitcoin is inevitable
  • Close-minded people will suffer
  • Why saving in fiat is setting yourself up for failure
  • The money of enemies
  • Bitcoin is agnostic
  • Regulators gonna regulate
  • Follow Jimmy Song
This episode is sponsored by: VAULD and VUORI.
My Recommended Platforms, Tools And Podcast Sponsors
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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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