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The Wolf Den #508 - Hot Or Not?

May 26 · Issue #508 · View online
The Wolf Den Crypto Newsletter
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In This Issue:
  1. Hot Or Not?
  2. Bitcoin Thoughts And Analysis
  3. Altcoin Charts
  4. Legacy Markets
  5. GPU Prices On The Decline
  6. Major Exchanges To Be Sued?
  7. Portugal Stands Strong On Crypto Taxes
  8. SBF Dunks On The CFTC
  9. The Wolf Of All Streets Podcast Ft. Bruce Fenton
  10. My Recommended Platforms And Tools
Is the market hot or not? 
At this point, most of us have a solid read on the temperature of the market. But understanding whether the market is bullish or bearish is only the beginning. Remembering what to do in each situation is the hard part. The average investor is inclined to let loose with their wallet when the market is hot and tighten up when things are cold. This is counterproductive to long term success.
Read that again, because the key point is LONG TERM.
Remember, you are not supposed to buy the top and sell the bottom, no matter how much your inner dummy tells you to.
I created a simple guide below for you to assess the market. Pick the answers that best describe the situation today. Take a mental note of whether your answers fall on the right or left. If you are picking answers on the left, it may be time to put a padlock on your wallet, throw it in a safe and bury it. If you are picking answers on the right, it may be time to gather up the loose change and start buying, assuming you are patient and contrarian.
FED - Dovish or Hawkish
Market Participants - Confident or Scared
Economy - Vibrant or Dull
Stimulus - Flowing or Dry
Interest Rates - Low or High
CPI - Low or High
Community Vibes - Positivity or Negativity
HODLERs - Calm or Panicked
Traders - Profitable or Unprofitable
Sentiment - Bullish or Bearish
Normie Attitude - Cheerful or Depressed
Earnings - High or Low
Tribalism - Negligible or Abundant
Funds - Opening or Closing 
Fear and Greed Index - Greedy or Fearful
News Station Focus - Buy Now or Sell Now
Absurd(ly high) Price Predictions - Abundant or Rare
Absurd(ly low) Price Predictions - Rare or Abundant
My answers were almost all on the right. How about you?
So what does this tell us about the temperature of the market?
If the market was a rapper, it would be Ice-T, Ice Cube or even Vanilla Ice. It’s frigid. Arctic.
You get the idea.
Remember these simple “checks” and use them to help determine when it is time to be contrarian. Ideally, we sell (slowly) when answers fall on the left and buy (slowly) when answers fall on the right. The problem is that we are human. Our psyche tells us to do the opposite, so we have to constantly fight against our natural instincts. And our natural instincts fight like Andre The Giant.
In the end, it is your own decisions as to when you choose to enter and exit the market and how much pain your are willing to suffer. This is a simple guide for those are willing to take a contrarian strategy and buy when assets are depressed. It’s not for everyone.
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.
Ethereum Accumulation
Following the recent Crypto market plunge, we have been looking at what whales are doing. In this case specifically, for ETH, the group of investors that hold between 10k and 100k ETH in their wallets are those that control the majority of ETH with almost one-fourth of the total ETH supply. This group of investors has a large influence on the price action of the asset, as can be seen in the chart below, their balance sheet in ETH continues to grow. They have been accumulating considerably, growing their total balance from 28.3M of ETH in March to 29.0M of ETH, almost 700k ETH more which is an equivalent of $1.38 billion.
The divergence on the indicator is evident, and this is a sign that this mass of investors might be looking to accumulate at these prices because they expect an appreciation of ETH in the future. Are they treating this market drop as an opportunity to buy at a discount and continue accumulating?
Besides what large whales are doing, the success of the Ethereum blockchain relies as well on smaller investors that decide to make use of the myriad of applications offered today, from DeFi to NFTs. A useful metric to gauge if this interest is growing or declining is to measure how many addresses there are with a modest balance of ETH, as a proxy of the retail sector. The range from 1 to 10 ETH is a perfect group to measure this, since it is what is usually a moderate balance that still allows users to interact with dApps and pay their gas costs more comfortably. As can be seen in the chart below, besides the market downturn, the addresses with ETH holdings between this range continue to grow considerably, going from 1.14 million addresses to 1.19 million addresses in just one month and a half.
Bitcoin Thoughts And Analysis
My Bitcoin thoughts and analysis are this… it is not particularly worth thinking about or analyzing Bitcoin price action at the moment. Price remains sideways and trading on extremely low volume. Key levels are on the weekly chart - that’s it for now.
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.
Things continue to go from bad to worse for altcoins. Bitcoin Dominance is currently rising once again, even with Bitcoin dropping. The worst case scenario in the short term.
I once again reiterate that I see no reason to be trading altcoins right now. I have bought a few long term (all are down), adding very small chunks to my existing holdings. But right now the market is VERY shaky and that’s a bad time to be actively trading these.
Also remember, charting Bitcoin Dominance is a bit of a joke. It’s not a traded asset. What matters is if it is clearly going up or down, and what Bitcoin is doing at the same time.
The chart does look a bit toppy, with likely overbought bearish divergence… but that was also the case before it pushed up here once again.
Legacy Markets
Stock Market Today: Dow, S&P Live Updates for May. 26, 2022 - Bloomberg
Here are some key events to watch this week:
  • US GDP, initial jobless claims Thursday
  • US core PCE price index; personal income and spending; wholesale inventories; University of Michigan consumer sentiment Friday
Some of the main moves in markets:
  • The Stoxx Europe 600 rose 0.3% as of 10:35 a.m. London time
  • Futures on the S&P 500 were unchanged
  • Futures on the Nasdaq 100 fell 0.3%
  • Futures on the Dow Jones Industrial Average were little changed
  • The MSCI Asia Pacific Index was little changed
  • The MSCI Emerging Markets Index rose 0.3%
  • The Bloomberg Dollar Spot Index fell 0.1%
  • The euro rose 0.1% to $1.0692
  • The Japanese yen rose 0.4% to 126.81 per dollar
  • The offshore yuan fell 0.6% to 6.7550 per dollar
  • The British pound rose 0.1% to $1.2590
  • The yield on 10-year Treasuries declined two basis points to 2.73%
  • Germany’s 10-year yield declined three basis points to 0.92%
  • Britain’s 10-year yield advanced one basis point to 1.92%
  • Brent crude rose 0.6% to $114.69 a barrel
  • Spot gold fell 0.5% to $1,845.07 an ounce
GPU Prices On The Decline
GPU prices are still on a decline: Is Bitcoin’s sorrow gamers’ joy?
Here’s one way to know you’re in a bear market - there are no complaints about GPU prices and availability. During the last crypto frenzy, it felt like everyone and their mother needed to get their hands on GPUs, driving up the price. Now that everything is more expensive and crypto has cooled off, the price of a GPU is no longer a point of discussion, and neither is the chip shortage.
During Q1 of 2021, it was reported that about a quarter of all GPUs were bought for crypto mining. When crypto booms, GPU prices soar and vice versa. Perhaps a good trend reversal sign will be when GPUs start to become harder to find and more expensive. This could be a leading indicator of the next bull market.
Major Exchanges To Be Sued?
I have received word from a verified source at a top law firm in the US that class actions are being prepared against Binance, Gemini, Kraken, and Coinbase under the Securities Act for the sale of UST and LUNA to US customers. They are looking to file within ten weeks.
I’m not sure how I feel about the statement above. Demanding reparations from exchanges would set a bad precedent. Suing major exchanges under the securities act opens the door for a host of other problems and probably makes the SEC drool in excitement.
Exchanges are largely just middle men. It is their job to list assets that their customers desire to trade. Crypto has always been about personal freedom.
Stocks are delisted from major exchanges all of the time, some of which end up being utter failures. Nobody sues the New York Stock Exchange.
This is a slippery slope.
*For now, the news is only a rumor.*
Portugal Stands Strong On Crypto Taxes
Portugal's Assembleia da Republica says no to two crypto tax bills
Portugal, which has always been viewed as a crypto friendly tax haven, recently made a move to reverse course and start taxing capital gains. The Portuguese Minister of Finance, Fernando Medina, made a statement effectively guaranteeing this would happen.
He was wrong. Portuguese Assembleia da Republica rejected both bills that would make crypto taxable.
Portugal remains a great place for crypto taxes and surfing monster waves.
SBF Dunks On The CFTC
The Wolf Of All Streets
Video of the day/week/month.

@SBF_FTX pointing out the obvious - that his customers know more about the platform then a room full of condescending boomers.
There are not enough ways for me to tell you how much I love this video, so I will just leave it here for you to watch. SBF sat before the CFTC firing squad yesterday and absorbed every bullet like he was in the Matrix.
Here is a monster thread of what went down.
1) some responses to comments at round table because there won’t be time to say them all:
The Wolf Of All Streets Podcast Ft. Bruce Fenton
Podcast - The Wolf of All Streets
There’s a gigantic shift occurring in how the world works. Border changes, power changes, government changes… nothing is off the table. Bruce Fenton believes there is nobody better to shape those changes and be part of building that new world than us Bitcoiners. And he’s running for Senate in order to help push that legislation forward. He joined us to discuss the Senate race, the evolution of Bitcoin, and the future of the world.
In this episode with Bruce Fenton, we discussed:
  • About our guest Bruce Fenton
  • Running for senate
  • The two party system
  • Winning is a big sacrifice
  • National security and increasing turmoil
  • Bruce’s path from Politics to Bitcoin
  • Bitcoin’s evolution
  • Government involvement in Bitcoin
  • “Cryptocurrency” vs “Digital Asset”
  • Proposing Bitcoin as legal tender
  • The Fourth Turning
  • What does the world look like in 10-20 years
  • Follow Bruce Fenton
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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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