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The Wolf Den #521 - Celsius

June 14 · Issue #521 · View online
The Wolf Den Crypto Newsletter
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In This Issue:
  1. Celsius
  2. Bitcoin Thoughts And Analysis
  3. Altcoin Charts
  4. Legacy Markets
  5. What’s Up With Binance?
  6. Nexo Offers To Buy Celsius
  7. Prominent Holders In Trouble
  8. The Wolf Of All Streets Podcast Ft. Dan Held, Preston Pysh, CJ Wilson, Steve McClurg, and Greg Foss
  9. My Recommended Platforms And Tools
As promised, I have more to say about Celsius. I will also have Mike Alfred joining me on YouTube today at 9:30 AM EST to discuss, as he has been one of the most vocal critics and whistleblowers for months.
Without the company’s financial statements in front of us, we are left wondering what type of insolvency Celsius is potentially facing. Insolvency, according to Investopedia is “when an individual or company can no longer meet their financial obligations to lenders as debts become due.” There are many ways to end up insolvent. This is important, because the variety of insolvency can greatly determine the outcome for investors.
To be clear, Celsius MAY NOT BE INSOLVENT.
There is conjecture that Celsius has a Bitcoin liquidation price of $16,852 after adding more collateral. However, nobody can confirm if this is all of their funds or just one part of their holdings. They could also add collateral if this price comes close.
Celsius adds more collateral amid market sell-off to protect their Bitcoin from liquidation
If Celsius is insolvent, they are either:
A. Cash Flow Insolvent - this is bad
B. Balance Sheet Insolvent - this is worse
If Celsius is cash flow insolvent, it likely means customer funds will eventually be returned and a large exodus of users caused a delay in their ability to get liquid and pay debts. This means Celsius has the assets to pay back what is owed, but just needs a bit of time to secure the liquidity. The company could sell off some of their positions (even at a discount) take a hit, and restore stability. That would be ideal.
If Celsius is balance sheet insolvent then it’s time to tuck your head between your legs and pray for a safe landing. This is a hard one to type because real people are going to be hurt in a very real way. The pause in withdrawals is already bad, but this would take the situation to another level. This would basically mean that Celsius does not have the means to pay creditors and assets could be absorbed. In other words, your money is gone.
Who knows how this could end. The company could be split up. The company could be sold. Celsius could attempt to trade their way out of the situation with the remaining funds.
Nobody knows and, unfortunately, the lack of transparency makes it impossible to make a definite guess.
This leads me to the next point. What happened to “unbanking yourself?“ In an attempt to break away from the establishment, we have become the very thing we feared the most. We have created a monster. Crypto is about bringing power back to the people, yet some of the toys and towers that we have built have done more harm than good. That’s a painful pill to swallow. It’s going to take a lot of time, reconciliation, regulation, and damage control to pick up the pieces if our favorite platforms continue to fall apart.
Again, to reiterate, we cannot yet say this about Celsius definitively. They are still paying out yields and people have made quite a bit of money on the platform.
What is at stake? The life savings of real people that trusted the platform. When Luna exploded, people lost their shirts. However, much of the damage was done to big players who either denied damage or shrugged it off as a temporary setback. The Celsius implosion is a bomb being dropped directly on retail. There are already terrifying accounts of stranded money causing harm to individuals who need access to their funds. The worst of the worst is that users with open borrows may have to choose between getting liquidated or depositing more collateral into a company sitting on the edge of a cliff - if they can even make that transaction.
There are no right answers and I won’t attempt to try.
It saddens me to have to write all this out, but it has to be said. We can do better and will do better.
Bitcoin Thoughts And Analysis
When “everyone” is watching a major level, if usually gets nuked or front run.
The crowd rarely nails the bottom.
The 2017 bull market high was 20K. We got $20,800. Is that enough, or is the nuke coming? If you caught an entry there as a trader, good job. Very good risk vs. reward. As a investor for the long term, I also view this as a good spot, knowing it can still go much lower and I will be forced to accept that.
The 200 MA is currently holding as support, with a wick below. This is something we have seen in the past. We want to see the weekly candle close in 5 days above that red line. Nobody said this would be easy.
We currently have a potential reversal candle, but 12 hours of hell to likely endure to confirm it. Insane volume yesterday, the highest in ages. If we can get a green candle today with a long wick down, then the bottom should be in for now. I am NOT calling macro bottoms (it could be, of course), just looking for more short term signals.
Altcoin Charts
Interesting and somewhat unfortunate situation unfolding. As you know, Bitcoin Dominance is a gauge of the percentage of the market cap of crypto that is in Bitcoin. When it rises, altcoins are usually suffering. When it falls massively, it is usually alt season. Well, in a strange confluence of events, we have Bitcoin dumping and Dominance falling off of a cliff. I have been predicting this fall based on past events, being overbought and bearish divergence forming. Sadly, this helped nobody, because the price of Bitcoin was dropping so hard at the time. Now Bitcoin Dominance has effectively reset RSI with minimal benefit to altcoins, although we should see it head all of the way to oversold and potentially the bottom of the channel.
Legacy Markets
Stock Market Today: Dow, S&P Live Updates for Jun. 14, 2022 - Bloomberg
It has been a wild week, and it is only Tuesday.
Markets are now pricing in a 75 basis points rate hike, higher than the 50 basis points that have been expected for months. This is a result of higher inflation than expected in May. Markets are reacting left and right, while Bitcoin as the highest beta asset gets crushed.
Keep your seat belt on.
What to watch this week:
  • US PPI, Tuesday.
  • FOMC rate decision, Chair Jerome Powell briefing, US business inventories, empire manufacturing, retail sales, Wednesday.
  • ECB President Christine Lagarde due to speak, Wednesday.
  • Bank of England rate decision, Thursday.
  • US housing starts, initial jobless claims, Thursday.
  • Bank of Japan policy decision, Friday.
  • Eurozone CPI, Friday.
  • US Conference Board leading index, industrial production, Friday
Some of the main moves in markets:
  • Futures on the S&P 500 rose 0.5% as of 5:57 a.m. New York time
  • Futures on the Nasdaq 100 rose 0.7%
  • Futures on the Dow Jones Industrial Average rose 0.4%
  • The Stoxx Europe 600 fell 0.8%
  • The MSCI World index fell 0.3%
  • The Bloomberg Dollar Spot Index was little changed
  • The euro rose 0.3% to $1.0439
  • The British pound fell 0.1% to $1.2117
  • The Japanese yen rose 0.1% to 134.25 per dollar
  • The yield on 10-year Treasuries declined five basis points to 3.31%
  • Germany’s 10-year yield advanced one basis point to 1.65%
  • Britain’s 10-year yield declined six basis points to 2.47%
  • West Texas Intermediate crude rose 0.7% to $121.75 a barrel
  • Gold futures fell 0.4% to $1,825.10 an ounce
The dollar is making new highs after 20 years, sending reverberations around all markets. It looked likely to get rejected at the highs, but has now broken through once again. This is generally considered a bad sign for other assets, like stocks and Bitcoin.
That said, thee dollar is also vastly overbought with clear bearish divergence forming. It will be interesting to see how high this can go, or if we are topping here once again.
What's Up With Binance?
After Celsius, Binance Temporarily Halts Bitcoin Withdrawals - Crypto Briefing
Bitcoin withdrawals were temporarily suspended, adding additional FUD and fuel to the Celsius fire. Here’s what we know.
From CZ’s Twitter:
Temporary pause of $BTC withdrawals on #Binance due to a stuck transaction causing a backlog. Should be fixed in ~30 minutes. Will update.
Funds are SAFU.
This is only impacting the Bitcoin network. You can still withdraw Bitcoin on other networks like BEP-20. 
Likely this is going to take a bit longer to fix than my initial estimate. More updates soon. Thanks for your patience and understanding.
What was supposed to last 30 minutes ended up taking a lot longer, which is annoying. I know the wording above is strange, but nothing is wrong with the Bitcoin blockchain. This was a Binance issue.
On a more positive note, Binance appears to be quite strong going into this bear market. CZ has publicly said the company has, “a healthy war chest” and the company is,“expanding hiring.”
Nothing to see here.
Nexo Offered To Buy Celsius
Nexo Proposes Celsius Buyout as Rival Lending Platform Halts Withdrawals
I talked about this story on my livestream, but it’s worth reiterating. Celsius might be in bad shape, but they aren’t dead yet. Knowing Mashinsky, he won’t go down without a fight, so it’s not a huge surprise that the offer hasn’t been immediately accepted. Every lending platform CEO is scrambling to appear strong, let’s just hope this all passes ASAP.
Prominent Holders In Trouble
Bitcoin slide leads to unrealized losses for prominent holders
The biggest mainstream Bitcoin holders are in trouble, including El Salvador, MicroStrategy, Tesla and Block (formerly Square).
“At last count El Salvador owned 2,301 BTC with an average purchase price of $45,171.86. As of Monday the Central American country’s investment is fast approaching an unrealized loss of up to 50%. 
Michael Saylor’s MicroStrategy saw its massive bet on bitcoin fall into the red in May when the price fell below its average purchase price of $30,700. Developments today have seen this bet plunge even lower.
MicroStrategy currently owns 129,218 BTC, held at an unrealized loss of 18% — although Saylor maintains his company has no need to consider selling.
Meanwhile Elon Musk’s Tesla owns approximately 42,000 BTC with a slightly higher average purchase price of $31,620. This leaves the auto company’s investment down a little over 20% at the time of writing. 
Finally, Jack Dorsey’s Block (formerly Square), which has the lowest average purchase price at $27,407, holds 8,027 BTC for an unrealized loss of just over 8%.”
MicroStrategy states recently that their liquidation price was $21,000, which we just hit. That said, they made it clear they could easily add to their collateral package to lower this number, which I would assume they have.
The Wolf Of All Streets Podcast Ft. Dan Held, Preston Pysh, CJ Wilson, Steve McClurg, and Greg Foss
Podcast - The Wolf of All Streets
We sat down at Bitcoin Miami for a roundtable with Dan Held, Preston Pysh, CJ Wilson, Steve McClurg, and Greg Foss. It turned into an epic conversation about the last year in Bitcoin as well as what to expect on the horizon. We cover bond markets, the energy FUD, Bitcoin mining, and the importance of educating politicians.
  • Biggest surprises in the last year
  • Bitcoin’s going mainstream
  • Saying goodbye to bond markets
  • The FUD landscape
  • The energy FUD and Bitcoin mining
  • Helping educate politicians
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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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