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The Wolf Den #512 - Bitcoin, Ethereum And Everything Else

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June 1 · Issue #512 · View online
The Wolf Den Crypto Newsletter
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In This Issue:
  1. Bitcoin, Ethereum And Everything Else
  2. Decoupling? IntoTheBlock
  3. Bitcoin Thoughts And Analysis
  4. Altcoin Charts
  5. Legacy Markets
  6. Stellar Steals The Show
  7. WTF Is Goblintown.wtf?
  8. Fidelity Now Offers Ethereum
  9. My Recommended Platforms And Tools
Bitcoin, Ethereum And Everything Else
Let’s keep it simple - the crypto market is Bitcoin, Ethereum, and everything else.
In the past, I would have said that the crypto market is Bitcoin and everything else, but the times they are a-changin’.
Yes, that is a Bob Dylan reference.
Few coins are holding up through the global market drawdown.
Stablecoins certainly don’t count and neither do obscure altcoins that randomly spike.
I often say that value and price are very different, but there’s something to be said about the value of a token when its price can endure a storm. The path to recovery from a 90% drawdown is brutal, even for a valuable project.
In bull markets, Bitcoin HODLERs are the brunt of everyone’s jokes. They take an unnecessary beating because Bitcoin’s gains are slower and less exciting. Non-Bitcoin maxis make Bitcoin their benchmark to beat. Their only focus is to outpace Bitcoin’s gains, which isn’t too hard in those rare moments when we are experiencing a full blown altseason. 
HODLers get the last laugh in a bear market, when these roles are reversed. 
In bear markets, Bitcoin has always been the most resilient asset. Ethereum has seemingly joined that category. Ethereum has paced Bitcoin during this bear market. Long-term HODLERs of both coins are “enjoying” the fact that their portfolios are down closer to 60% from the highs instead of 80%, 85%, or 90%.
In a down market, the goal is to survive.
You may laugh at the notion that these coins are “only” down 60%, but there is a vast difference between this performance and the losses incurred elsewhere. If you were running a hedge fund and the entire market was down 80% and you were down 60%, it would be considered a “success.”
Losing less is a noble goal.
So when you think about it, what competitors does Bitcoin have? The answer is none. Bitcoin is hard, sound money.
Ethereum has rivals, but the weaker ones are slowly falling off of a cliff. I believe that we will live in a multichain world, and that many Layer 1s will succeed. But I do not believe that any of them will steal Ethereum’s thunder. It is here to stay.
It’s times like these we remember why Bitcoin and Ethereum are so important. 
They are our ticket to survival.
Decoupling? 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.
Decoupling?
It’s no secret that Bitcoin has been acting almost like a levered long to broader markets. During the first 5 months of 2022, due to their high correlations with Bitcoin, other crypto-assets are closer to a 5x long ETF, while Bitcoin may be closer to a 3x in relation to the S&P 500.
But since late May, we are finally seeing a decoupling of US equities and crypto-assets.
2 month low - On Friday, we started to see a divergence between equities and crypto. As the S&P started to recover and went above $4,000, crypto saw new lows that day.
  • The correlation between Bitcoin and US equities is currently at the lowest point since March 25th, marking a 2-month low.
  • Shortly after that, Bitcoin started a relief bounce back to $32,000. After seeing the Nasdaq100 bouncing decisively and BTC staying relatively flat for a week and oversold for months, there was no reason for buyers to take the opportunity.
  • Bitcoin continues to act as a speculative asset, and with the current macro uncertainty, we might see a coupling in the correlation again.
Bitcoin Thoughts And Analysis
Bitcoin is consolidating nicely after the sizable move up two days ago. The question becomes - is it consolidating for another move up and a test of the 33K resistance, or is it setting us up for a disappointing “Bart” pattern and retrace.
Nobody knows the answer to that question - we just have to wait and watch.
The chart is little changed since yesterday.
MONTHLY CHART
May is over, June is upon us. The summers have been historically slow. Last summer was a slow grind on low volume in a sustained bear market. I would not be surprised to see the same.
Not much to see on the monthly chart. We do have a nice long wick down, which means that bulls stepped in during May to defend the lows. More importantly, we have a bullish SFP at $28,800 - a wick below key support and close above. This is another sign that there is a lot of liquidity below that level.
On the bearish side, this move down represents a lower low.
DAILY CHART
Bear market.
As you can see, we have a series of lower highs and lower lows since the all time high. This is how many define a bear market or downtrend. It would require a break of $48,128 to break this trend as that was the most recent lower high in the series.
We have a long way to go.
That said, it would be encouraging to at least get above $33,000 to start the process.
Yesterday’s candle was a doji, signaling indecision. We want to see real follow through from Monday’s move up.
4-HOUR CHART
As I mentioned yesterday, RSI was massively overbought on the 4-hour, making a bear div almost inevitable if there was another push up. This happened. Now we watch for potential hidden bullish divergence to invalidate that bearish divergence, which we are working on now.
Either way, RSI has reset below overbought without much of a drop, which is what we want to see. I would love to see this continue, with Bitcoin having a longer runway for another push up.
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.
SAND/USDT
I remain hesitant on altcoins and generally don’t feel it necessary to share setups right now. That said, for those looking for setups, this is worth watching. You have to understand that in a shaky market, even good looking setups can fail quickly.
SAND is setting up in a potential ascending triangle with a neckline at $1.53. As you can see, we have higher lows consolidating up to a flat top, which is the criteria. This would only be valid if we see that trend continue and then see a break of $1.53 This would give us a target around $2.43 based on the depth of the pattern.
Most conservative traders look for a break of the neckline resistance and retest as support for an entry.
This coin still generally has decent volume, so worth watching if altcoins reverse.
Legacy Markets
Stock Market Today: Dow, S&P Live Updates for Jun. 1, 2022 - Bloomberg
There’s been much ado about quantitative easing for the past decade, but today a new process will begin. Welcome to the era of QT - quantitative tightening.
The Federal Reserve’s almost $9 trillion portfolio is about to be reduced starting on Wednesday, in a process intended to supplement rate hikes and buttress the central bank’s fight against inflation.
While the precise impact of “quantitative tightening” in financial markets is still up for debate, most analysts believe this is yet another headwind for markets.
In a nutshell, “quantitative tightening” is the opposite of “quantitative easing”: It’s basically a way to reduce the money supply floating around in the economy and, some say, helps to augment rate hikes in a predictable manner — though, by how much remains unclear.
If you need a visual aid, here is one of my favorite scenes from Space Balls.
Mega maid suck to blow
Here are some key events to watch this week:
  • The Federal Reserve is set to start shrinking its $8.9 trillion balance sheet Wednesday
  • The Fed releases its Beige Book report on regional economic conditions Wednesday
  • New York Fed President John Williams, St. Louis Fed President James Bullard speak at separate events Wednesday
  • OPEC+ virtual meeting Wednesday
  • Cleveland Fed President Loretta Mester discusses the economic outlook Thursday
  • US May employment report Friday
  • The UN’s Food and Agriculture Organization releases its monthly food price index at a time of maximum concern about global supplies on Friday
Some of the main moves in markets:
Stocks
  • The Stoxx Europe 600 fell 0.3% as of 9:07 a.m. London time
  • Futures on the S&P 500 were little changed
  • Futures on the Nasdaq 100 fell 0.2%
  • Futures on the Dow Jones Industrial Average rose 0.3%
  • The MSCI Asia Pacific Index fell 0.1%
  • The MSCI Emerging Markets Index fell 0.7%
Currencies
  • The Bloomberg Dollar Spot Index was little changed
  • The euro was unchanged at $1.0734
  • The Japanese yen fell 0.5% to 129.31 per dollar
  • The offshore yuan fell 0.3% to 6.6969 per dollar
  • The British pound was little changed at $1.2608
Bonds
  • The yield on 10-year Treasuries advanced two basis points to 2.86%
  • Germany’s 10-year yield advanced one basis point to 1.13%
  • Britain’s 10-year yield advanced three basis points to 2.13%
Commodities
  • Brent crude rose 1.8% to $117.71 a barrel
  • Spot gold fell 0.1% to $1,835.20 an ounce
Stellar Steals The Show
MoneyGram to open transfer platform with Stellar, eyes wallet deal in El Salvador
Remember the rumor years ago that Ripple was going to partner with MoneyGram and become the world’s first cryptocurrency to work with a major cross-border transfer service? It looks like Stellar has stolen the show. Through a strategic partnership, Stellar wallet users will be able to send USDC through Moneygram’s services and cash out for fiat. According to Alex Holmes, the CEO of MoneyGram, the company is also in talks with El Salvador and companies working on Bitcoin there to make Bitcoin remittances possible.
If a country like El Salvador is going to make Bitcoin seamless with US dollars in-country, I think that consumers, through MoneyGram, should be able to transfer Bitcoin to El Salvador or transfer dollars and convert them to Bitcoin. If that’s where the world is going, let’s participate in that world, and let’s see how we can help fulfill that opportunity” - MoneyGram CEO.
WTF Is Goblintown.wtf?
goblintown
No roadmap. No Discord. No utility. CCO. Contract wasn’t actually written by goblins.
This is what’s written on their website… and the floor price of the project is over 4 Ethereum. Go figure. If you have hang around Twitter late at night, you may see one of their Spaces taking place. If you join, turn down your volume because you are going to be bombarded with unintelligible sounds and complete nonsense.
This project is capturing the essence of a bear market. To be frank, it kind of feels like Doge’s ugly cousin. Goblintown is brutally honest and almost entirely a meme. From a macro sentiment standpoint, this is probably a landmark that we are nearing a bottom. Beware of rumors surrounding this project, there are some big ones floating around.
I would not touch this with a ten foot pole, I am merely showing you how low the bar is being set during this bear market.
Fidelity Now Offers Ethereum
Fidelity to Offer Ethereum Trading and Custody - Crypto Briefing
Just in time for the merge, Fidelity is planning to offer trading and custody services for Ethereum. To build out the infrastructure, Fidelity’s digital asset subsidiary is hiring 200 new employees. Just last month we saw Fidelity allow Bitcoin to be in 401 (k) retirement accounts. Maybe Ethereum is next?
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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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