The Wolf Den Crypto Newsletter

By Scott Melker aka The Wolf Of All Streets

The Wolf Den #487 - Don't Panic





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April 27 · Issue #487 · View online
The Wolf Den Crypto Newsletter
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Don’t panic.
Easier said than done, right? Markets are slowly bleeding crypto has not been immune. Bitcoin price continues to hover below support, negating many bullish cases and inflicting maximum pain to the impatient.
As I have continued to point out, the price does not drop by large increments in a matter of minutes because your average trader is panic selling. That only happens when a large party decides to inflict pain on the market, dumping coins to coincide with global events. This is the easiest way for them to sell - there is little friction in the order books and everyone will sell along with them when they see the price dropping. So maximum pain it is.
Their motivation is impossible to discern. There are whales who have more Bitcoin than we can imagine, or that they can ever hope to sell on exchanges. This means that it benefits them to sell at any price, whether it be $40,000 or $25,000. They need the liquidity - price is irrelevant. It could be a single party liquidating all of their holdings to retire to an island. There is no way to know. This is the risk of investing in markets where the bulk of an asset is owned by a select few who can easily move the price on a whim. That’s why our goal as traders and investors is always to “think like a whale” and be on their side.
As you know, a large portion of my crypto portfolio is in long term Bitcoin and Ethereum holds. This part of my holdings has seen a significant reduction in value, like everyone else’s. It is painful, but hindsight is 20/20. Nobody can expect to time tops and bottoms. All we can do is invest what we can afford to lose, step back and let it play out. I still firmly believe that Bitcoin and Ethereum will eventually see new all-time highs. I also still firmly believe that Bitcoin will have tremendous VALUE regardless of PRICE if the world descends into more chaos. Nothing changes for me because of slow price movement.
The same goes for legacy markets. While I have successfully shorted a number of assets in the past, it is not enough to offset the (hopefully temporary) losses in my portfolio. Everyone is feeling the pain for now. But things will get better - it’s just a matter of time. Things ALWAYS get better if you take your time and move slowly.
I am not a financial advisor. The only advice I can give is to stay calm, move slowly, and avoid rash decisions. There are real opportunities now if you look for them. Plus, the world will eventually recover and so will your portfolio. When people really start to capitulate (already seeing signs), the buying opportunities will be numerous.
In This Issue:
  1. Don’t Panic
  2. On-Chain Strength - IntoTheBlock
  3. Bitcoin Thoughts And Analysis
  4. Altcoin Charts
  5. Fidelity Offers Bitcoin Access In 401(k) 
  6. Grayscale Shows Interest In European Market
  7. This Small City Is Mining Bitcoin
  8. My Recommended Platforms And Tools
On-Chain Strength - 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 Strength
Bitcoin and broader crypto markets retraced significantly over the past few days. However, on-chain indicators remain strong.
IntoTheBlock classifies hodlers as all addresses that have been holding an asset for a weighted average time of at least one year. Growing long-term investors suggest the belief that an asset will retain or increase its value over time, which is a key characteristic of store of value assets.
In Bitcoin’s case, the number of hodlers has grown consistently, regardless of price volatility. Along with the number of long-term investors, the total number of Bitcoin holders has also been increasing.
The total number of addresses with a balance (holders) reached a new high of 41.06 million this week. This suggests growing adoption in Bitcoin in spite of short-term price corrections.
While both of these indicators point to a positive outlook, institutional activity in Bitcoin appears to be slowing down. Large transactions volume — which IntoTheBlock classifies as the aggregate amount sent in transactions of over $100,000 — has been declining throughout the past months.
This decrease comes after multiple consecutive months of growing institutional adoption of Bitcoin. Overall, the outlook for Bitcoin remains strong despite the recent price correction. While market downturns are common, savvy investors should keep an eye on key indicators to spot fundamental value emerging from recent and upcoming developments.
Bitcoin Thoughts And Analysis
Bitcoin is building more potential bulls divs on more time frames. As I often say, they are signals that a bottom is forming, but not necessarily that price is ready to skyrocket yet. As you will see on the daily, for example, price has dropped further after a confirmed divergence, only to potentially form a larger one.
I still think odds are that the lows are in or close but you should formulate your own opinions.
We also have “extreme fear” in the market now, usually confluence that a bottom is likely forming, although you can remain fearful for a long time.
Crypto Fear & Greed Index - Bitcoin Sentiment -
The daily chart is still holding higher lows for now, which is encouraging. That said, the local range that price has been trading in between the black lines finally broke as support, and today’s candle has topped so far right at resistance. You do not want to see support flipped to resistance, so $39,218 is worth watching closely.
We had confirmed bullish divergence yesterday a drop and now an even larger potential bullish divergence. We need to watch the daily close, but this div is already confirmed on lower time frames.
These divergences are all over the place. The longer line is not a single div, but just showing consistent higher lows in RSI with lower lows on price. We have a local divergence that is confirmed, after price once again touched oversold. My favorite bottoming signal, with a very high hit rate (nothing works every time).
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.
A number of altcoins are sitting at key support levels, many showing bullish divergence with RSI on various time frames. If you are the type of trader to buy support and catch a knife, then there are some potential opportunities. This is a risky strategy, and requires you to either be willing to average down further as an investor if support breaks, or take a small loss with a reasonable stop loss as a trader.
Here are a few charts bouncing (for now) on support. If the Bitcoin bottom is in, as indicated is possible because of the bullish divergences, then this could be a great spot on altcoins. That said, they are all trading below key MAs and have lots of resistance above. Choose wisely.
To be VERY CLEAR, my bags are full of most of these coins and my exposure is already high. I am NOT generally a buyer, just providing you charts if it fits your system.
Key support at $20.21. Has oversold bullish divergence on the 4-hour chart (not shown).
BNB is testing the EQ of the massive blue channel as support - the dashed line. EQ means equilibrium, which is the center line of any channel.
EGLD is bouncing off of ascending support.
ETH bounced off of support at around $2,774. Yesterday’s candle literally tested resistance around $3,045 and filled the space between the two key levels.
Testing support at $.9587, which was a previous all time high for quite a long stretch. This is an important level. Also has oversold bullish divergence on the 4 hour (not shown).
LTC is bouncing off of key support at $96.335, with a nice potential bullish divergence on the daily. We want to see RSI form a definitive elbow up to confirm, but this is a key level regardless.
MATIC is currently bouncing from the key support at $1.245. This is a key area.
SOL is currently holding a key level of support at $94.55.
Fidelity Offers Bitcoin Access In 401(k)
Fidelity To Allow Bitcoin Investments In Retirement Plans - Bitcoin Magazine: Bitcoin News, Articles, Charts, and Guides
The U.S. retirement market last year was $37.2 trillion. A large portion of that belongs to 401(k) plans. Investors with 401(k) plans have been historically unable to invest directly in Bitcoin. Until now.
Fidelity, who has been leading the charge for institutional adoption of crypto for half a decade, is now the first major retirement-plan provider to allow its 401(k) clients to buy Bitcoin. The plan is simple. Fidelity will only allow investors to invest up to 20% of their retirement account in Bitcoin.
The size and potential butterfly effects of this announcement are colossal. Fidelity currently manages employee benefit programs for nearly 23,000 businesses - $2.7 trillion in its retirement division. 
Now imagine what this moves means for Fidelity’s competitors, like BlackRock, Edward Jones and Charles Schwab. The worst thing that can happen to one of these other companies is losing clients to a competitor, so they will likely have to offer similar services.
This is the first big step in unlocking the world’s retirement money.
Grayscale Shows Interest In European Market
Grayscale Eyeing Expansion Into European Crypto Fund Market: Report
According to a Bloomberg report, Grayscale is meeting with local partners to explore an EU expansion. According to Michael Sonnenshein, no decisions have been finalized surrounding which countries or exchanges will be targeted. The EU already has a robust fund market, with 74 approved exchange-traded products already available. Grayscale clearly sees an opportunity.
This Small City Is Mining Bitcoin
City of Fort Worth votes in favor of Bitcoin mining program
Fort Worth Texas made history after a vote in favor of being the first city government in the U.S. to mine Bitcoin on-site. Within the city hall, three Bitmain Antminer S9 mining rigs will run 24 hours a day, seven days a week. 3 rigs is hardly a large step, but Rome wasn’t built in a day.
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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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