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The Wolf Den #495 - The IMF Is The Enemy

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May 9 · Issue #495 · View online
The Wolf Den Crypto Newsletter
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The IMF is arguably the most villainous entity in the global financial world.
Last week, Argentina’s Central Bank decided to place a blanket ban on crypto and disallow institutional access to crypto. This if horrible news for the people of Argentina. According to Chainanalysis, Argentina is ranked 10th in the world in crypto adoption, largely because of rampant inflation and the need for a store-of-value. In a vacuum, the ban makes little sense.
Argentina is not operating in a vacuum.
In March, the IMF made a $45B loan to Argentina to assist with the country’s most pressing fiscal challenges. This loan came with stipulations regarding cryptocurrency. The IMF basically forced the country to choose between the loan and crypto.
The IMF gave Argentina no choice. Over 40% of the population lives below the poverty line and the country is expecting 60% inflation this year. So almost half the country lives meal to meal and more than half of the money earned is wiped away. So instead of the IMF encouraging a country to explore new financial opportunities, it traps Argentina as a debt slave, which has been the IMF playbook since its inception.
Here’s a hint of the IMF’s views on crypto.
As national currency, cryptoassets—including Bitcoin—come with substantial risks to macro-financial stability, financial integrity, consumer protection, and the environment.
Attempting to make cryptoassets a national currency is an inadvisable shortcut.
Finally, mined cryptoassets such as Bitcoin require an enormous amount of electricity to power the computer networks that verify transactions. The ecological implications of adopting these cryptoassets as a national currency could be dire.
The increased and sizeable co-movement and spillovers between crypto and equity markets indicate a growing interconnectedness between the two asset classes that permits the transmission of shocks that can destabilize financial markets.
The IMF clearly has no issue with making its stance public. All of these quotes can be found in various blogs on their site.
This isn’t the first time the IMF has pulled this stunt. Ever since El Salvador decided to accept Bitcoin, the IMF has targeted the country and has slowed down relief. A $1.3B loan has been stuck in negotiation for months. as the IMF pressures El Salvador to cease its Bitcoin operations.
The IMF’s goal is to capitalize on the desperation of poor nations, locking them into a debt cycle that they can never escape.
The Central African Republic adopted Bitcoin last week. Here’s what the IMF immediately had to say about it.
“The adoption of Bitcoin as legal tender in C.A.R. raises major legal, transparency, and economic policy challenges,” the fund said in an emailed response to questions. “IMF staff are assisting the regional and Central African Republic’s authorities in addressing the concerns posed by the new law.”
The IMF is doing this out of desperation to maintain its fiat monopoly.
Fighting Bitcoin won’t be cheap. We know what’s coming. An open-source, decentralized, digital, and immutable technology will win.
F**K the IMF.
Bitcoin fixes this.
In This Issue:
  1. The IMF Is The Enemy
  2. Bitcoin Thoughts And Analysis
  3. Altcoin Charts
  4. Legacy Markets
  5. Pro Tip: Don’t Quit Your Day Job
  6. UST Peg Under Pressure
  7. Enter The Era Of Algorithmic Stablecoins
  8. My Recommended Platforms And Tools
Bitcoin Thoughts And Analysis
Woke up this morning, checked charts.
My first reaction was audibly saying “ARE YOU F*CKING SERIOUS?”
I rarely react to price action, but the alt capitulation and the continued Bitcoin drop is clearly wearing on me.
Usually a sign that relief is near.
Nobody is immune to emotion when their portfolio is evaporating, but I have found that in the past when I start to feel worn out or desperation creeping in, it’s usually close to a bottom (not always THE bottom).
WEEKLY CHART
The bloodbath continues. The market is starting to truly feel like capitulation to me, but that could be “wishful thinking” because few want to admit that it can go lower (it can, of course).
I am still leaning towards a bottom forming soon for now, but nobody knows what comes next.
Bitcoin continues to break support after support, now approaching a key level at $32,933. Below that we have the psychological $30,000 level and then of course the 2021 low of $28,732. Let’s not discuss lower levels for now.
We now have SIX RED WEEKS IN A ROW, which is a record for Bitcoin. The last time we had 5 was before there were charts on TradingView, and never on Bitstamp. This price action is brutal.
That said, it’s important to remember that we are sitting above key support again, which is not the time to start shorting or become even more bearish.
We have potential bullish divergence on the weekly chart, not something we see often. The top was preceded by an overbought bear div, although over way too long a period of a time to be particularly valid. As you can see, the weekly is far from oversold (price would be MUCH lower) and we need RSI to elbow up to confirm, which is not even close at the moment. But at the weekly close we did have a higher low on RSI, so the idea is there for now.
Weekly divs take ages to play out, so nothing to really do here. Just worth watching.
DAILY CHART
Daily RSI hit overbought in March. We know that it always makes the trip back to oversold eventually, although this can take months and even years. Well, we are now touching oversold on the daily, although we would need price to close at the current level or below to confirm. The bullish divergences failed, showing us that no signal is certain. The hidden bearish divergence clearly invalidated this idea.
If we hit oversold, we can stay there a long time, push deeper in, so it’s not time to rush into positions. What we do know is that it will head back up to overbought again eventually.
The ascending red channel broke down in dramatic fashion and it’s been nothing but down since. That said, we are approaching a major level of support at $32,950. It would be wonderful to see a wick below that level and a close above, proving there is liquidity and buying interest and forming a bullish SFP. That’s a dream for now, so we will see.
I am personally going to add to my longer term holdings in this area, just a bit. I will also be bidding lower levels, like 30K and 28K. If that breaks, I will really kick in the buying.
My long term belief has not changed at all. You’ll know you are making good buys when you literally feel sick doing it.
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.
Remember when altcoins were surprisingly outperforming Bitcoin last week, even as Bitcoin dumped? That didn’t last. As I feared, Bitcoin Dominance is now bouncing with Bitcoin dropping, causing an absolute delayed blood bath across the board. Make no mistake, it is ugly out there and can always get much worse, considering that Bitcoin Dominance has barely bounced.
Not an ideal situation. If Bitcoin continues to drop and alts underperform, we are going to see discounts that would make even the most price conscious coupon clipper feel lightheaded.
We are finally at a point for me where the price of some of the larger and stronger altcoins is getting low enough to start considering some small entries for the long term.
Haven’t bought anything yet, but will be looking at favorites like SOL, AVAX, LUNA, MATIC, ETH etc. in the coming days and weeks for potential entries.
Right now, everything is a falling knife. We either want to buy support or wait until we see signs of a reversal. Nothing to do here but watch.
Legacy Markets
There’s little relief in site thus far for markets… any of them. The S&P has now booked 5 straight weeks of decline as of Friday, a steady drop across the board on fears of further Fed tightening and Chinese supply chain woes.
It’s ugly out there, and crypto is the red headed step child, taking the extra beating from the bigger players. Here’s a decent quick summary of what is happening pre-market.
Dow Futures Slide, Tech Sells Off, Bond Yields Surge—and What Else Is Happening in the Stock Market Today
Pro Tip: Don’t Quit Your Day Job
The things you do to make money each day are the anchor, no matter what happens to your volatile portfolio.
Unless you are constantly selling from your investment portfolio to live, it should be viewed more like a savings account than as income. Of course, there becomes a certain point where, if invested wisely, you can simply live off of the interest from your investments and never work again. But for most, that will never be a reality and is largely dependent on the value of the investment portfolio never dropping. We know that is not something you can count on, especially in the crypto market. If you “retire” and then immediately experience a 50% drawdown in portfolio value, what will you do?
Most people who quit their job to go full-time crypto end up either broke or bored and unhappy. Neither is desirable. Finding a better job that makes you happy would be a more compelling idea than quitting altogether.
Just because the number is big, does not mean that it will always remain that way. Quitting the things that provide a solid floor and foundation is unwise until the number is so big that you can cash out and never look back. But that requires you to cash out.
And we know that nobody here intends to cash out their entire crypto portfolio in this market…
My advice - remain sensible and grounded and keep doing what you are doing. It’s likely working. Then, have a plan for exiting so that you know what to do when the proper time comes.
UST Peg Under Pressure
UST Stablecoin Briefly Loses Peg, Luna Drops 10%
Prepare for bearish FUD! Over the weekend, Terra’s algorithmic stable coin faced serious pressure from what may have been a coordinated attack against the ecosystem. For 16 hours, the UST coin traded below $1, caused by the combination of a massive and well-timed dump, follow-up shorts and coordinated FUD on social media. Do Kwan didn’t seem to care and instead used the spotlight to poke holes at the community and inject confidence back into his prized possession. 
It’s hard to say where any of this goes, but it’s a good reminder to the broader community that entities are out there that desperately want to see us fail. It’s not hard to find someone hoping Michael Saylor gets liquidated, El Salvador crumbles, and algorithmic stablecoins blow up. For investors who want to de-risk, finding a stable coin with less controversy is reasonable.
Enter The Era Of Algorthmic Stablecoins
Cardano’s (ADA) First Algorithmic Stablecoin Goes Live on Public Testnet - The Daily Hodl
Cardano has become the next blockchain to launch an algorithmic stablecoin - shocker. The stablecoin will be named Djed and will be backed by a reserve currency called Shen. Tthe project has been in the works since last July and will release this June, probably to keep up with the current trend.
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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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