The Wolf Den Crypto Newsletter

By Scott Melker aka The Wolf Of All Streets

The Wolf Den #553 - Friendly Fire





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August 1 · Issue #553 · View online
The Wolf Den Crypto Newsletter
Welcome to The Wolf Den! This is where I share my ideas about the market, technical analysis, education and advice regarding trader psychology and emotional control. The newsletter is released every weekday and is completely FREE.
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In This Issue:
  1. Friendly Fire
  2. Bitcoin Thoughts And Analysis
  3. Altcoin Charts
  4. Legacy Markets
  5. Don’t Make These Rookie Mistakes
  6. Charles Schwab Launches A Crypto ETF
  7. Ethereum’s 7th Anniversary
  8. Ran Neuner: Losing Over $100 Million With Luna Helped Me Reevaluate My Life | Crypto Banter
  9. My Recommended Platforms And Tools
Friendly Fire
Will Ethereum overtake Bitcoin?
This question has seemingly become the most important and polarizing discussion in crypto. Regardless of individual opinions and agendas, Bitcoin and Ethereum are unquestionably the two most important assets in our space. What this means for many people is that it would be monumental for Ethereum to surpass Bitcoin in market cap.
Considering the growing possibility of a flippening as the merge nears (now roughly slated for September 19th, 2022), we can reasonably expect sentiment to polarize even further. Investors new and old will likely entrench in opposing camps, leaving a gaping hole in the middle.
As usual.
So what exactly is there to hate about Ethereum?
A Bitcoin maximalist will publicly tell you that Ethereum is a security. Gary Gensler may privately concur. Depending on their level of toxicity, a maxi may tell you that Ethereum is a scam, that Vitalik is evil, and that Ethereum’s claim to be “money” is a threat to the very existence of Bitcoin.
Either way, as the merge approaches, these opposing camps will further separate, as one side cheers for Ethereum price to go up and the other side cheers for its demise. The critics are intentionally choosing to spill blood.
It’s a shame.
Have you started to notice the growing crowd that wants Ethereum to be labeled a security? If Ethereum is deemed as such, then just about everything other than Bitcoin will likely follow. It would be wildly damaging for crypto in the US, leaving Bitcoin as the only viable asset.
Is this really what we want?
My opinion is this: the friendly fire MUST stop.
Here is an excerpt from a recent podcast of Michael Saylor describing Ethereum. You all know that I am a huge fan of Saylor and consider him a friend, but I disagree with some of this. You can watch the full video HERE.
You have a technical issue, an economic issue, and an ethical issue. For the ethical issue, it’s an unregistered security. It’s unethical to murder the Ethereum mining industry just because you want to. It’s unethical to sell a commodity that is secured. The second issue is that it’s not economically sound. There is no issuance schedule or protocol that is set in stone for the next thousand years. Lastly, for the technical issue, the protocol changes every year. There is a small group of people that just keep making stuff up. Technically, it’s too ambitious. It’s cool but there are billions of dollars worth of hacks.
We can also make a list of advantages that Ethereum has over Bitcoin, but what good does it do to compare apples to oranges?
And that is the point. Bitcoin and Ethereum share an underlying technology, but that’s where the comparisons end for me. There is Bitcoin and then there is everything else. And that’s fine. One has little to do with the other. Bitcoiners should not need to “defend” Bitcoin against Ethereum or any other coin, because Bitcoin is already well established and has solidified it’s place. I actually believe that the defensiveness of Bitcoiners makes them look weak, because there is no actual threat. This is a compliment to Bitcoin and a statement about it’s strength.
Bitcoiners hating Ethereum is akin to gold bugs taking issue with Amazon stock enthusiasts. One has little to do with the other, so this doesn’t even happen.
Here are more thoughts from Saylor.
The industry has to grow up and it will. At the end of the day, the basis of securities laws are biblical, they go back thousands of years. Hammurabi’s code even. The basis of security laws is thall shall not lie, cheat, or steal. Saying these are antiquated laws from 1933 that don’t apply to crypto, is a dead-on-arrival argument. The law is don’t lie cheat or steal, it’s instantiated in different years in different places. The future of the industry will have to be based on an ethically sound foundation, a technically sound foundation, and an economically sound foundation. Bitcoin is all of these.
I agree with this, and share his beliefs about Bitcoin.
But that does not mean there’s no place for everything else.
My goal with this intro is to offer you some perspective, so that you can create your own investment thesis.
At the end of the day, sentiments derive from narratives, and narratives fuel price - this is your macro playbook in one sentence.
So before you leave, consider this intro my white flag. Even if Bitcoin and Ethereum are similar in some ways, Ethereum is not a threat to Bitcoin and Bitcoin is not a threat to Ethereum… and neither are a threat to you.
Bitcoin Thoughts And Analysis
July was the most bullish month for Bitcoin since October, up 17%.
I have shared the channel above many times. As you can see, it almost hit support, and as that line rises, even sideways price action could touch it. That said, there’s no reason that Bitcoin has to come all of the way down to the channel lows.
The past two months were the lowest in history for monthly RSI, showing just how brutal this bear market has been.
Hard to surmise much from the monthly chart, but notable that we finally got a bit of relief.
Bitcoin closed 6 weekly candles below the 200 MA. There had never been more than 1 weekly close below this line in the past…
Finally, Bitcoin is back above the red line, which it already almost tested again as support today.
History can only offer so much insight, but a recapture of the 200 MA as support has never failed in the past.
Zooming in, we can see that Bitcoin has made a clean series of higher highs and higher lows since the bottom. Some would call this a bear flag, but I disagree. It’s been happening for way too long to be a flag, although that obviously does not mean price can’t go down. RSI has also continued to offer easy clues for local tops and bottoms, traveling back and forth from overbought to oversold.
We just hit overbought a few days ago, and dropped. Not hard to predict when the coin is effectively ranging sideways. Eventually we will hit oversold again.
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.
Ethereum broke out of an ascending triangle , coming about $100 short of the target shown in green. I shared this setup before it happened.
As you can see, ETH appears to be forming a bull flag, although there is currently no second touch on the bottom support. Either way, this appears to be consolidating bullishly for another move to the upside on low time frames.
It is currently trading right at local support, around $1664.
If you are looking to trade this, you WAIT until a clear break of the flag top resistance. A breakout would have a target around $2200, based on the length of the flagpole.
Legacy Markets
Stock Market Today: Dow, S&P Live Updates for Aug. 1, 2022 - Bloomberg
What to watch this week:
  • Airbnb, Alibaba and BP are among earnings reports
  • US construction spending, ISM manufacturing, Monday
  • Reserve Bank of Australia rate decision, Tuesday
  • US JOLTS job openings, Tuesday
  • Chicago Fed President Charles Evans, St. Louis Fed President James Bullard due to speak at separate events, Tuesday
  • OPEC+ meeting on output, Wednesday
  • US factory orders, durable goods, ISM services, Wednesday
  • BOE rate decision, Thursday
  • US initial jobless claims, trade, Thursday
  • Cleveland Fed President Loretta Mester due to speak, Thursday
  • US employment report for July, Friday
Some of the main moves in markets:
  • Futures on the S&P 500 fell 0.3% as of 8:15 a.m. New York time
  • Futures on the Nasdaq 100 fell 0.2%
  • Futures on the Dow Jones Industrial Average fell 0.1%
  • The Stoxx Europe 600 rose 0.3%
  • The MSCI World index rose 0.3%
  • The Bloomberg Dollar Spot Index fell 0.3%
  • The euro rose 0.1% to $1.0233
  • The British pound rose 0.5% to $1.2227
  • The Japanese yen rose 0.7% to 132.30 per dollar
  • The yield on 10-year Treasuries was little changed at 2.65%
  • Germany’s 10-year yield was little changed at 0.82%
  • Britain’s 10-year yield was little changed at 1.87%
  • West Texas Intermediate crude fell 3.2% to $95.43 a barrel
  • Gold futures rose 0.4% to $1,789 an ounce
Don't Make These Rookie Mistakes
The worst places to keep your crypto wallet seed phrase
You might think some of the tips in this article are obvious, but somehow people are still making these same mistakes. Your phone is not a good place to store your seed phrase. You also should not store it under your mattress. Take some time and think for yourself. Come up with something that works for you. This is one of the most important decisions you will ever make.
Charles Schwab Launches A Crypto ETF
Charles Schwab to Launch Crypto-Themed ETF on New York Stock Exchange - Decrypt
Charles Schwab is officially joining the crypto ETF competition, as the firm prepares to launch its first ETF this week. The Schwab Crypto Thematic (SCTE) will offer indirect exposure by tracking companies that offer services in the industry.
Going live on August 4th, the fund will offer an expense ratio of 30 basis points, meaning for every $1,000 invested, it will cost $3. Part of Schwab’s pitch is its competitive pricing. The 0.3% expense ratio is lower than the other products that already exist. Bitwise is at 0.85% and VanEck is at 0.5%.
The same company that was dismissive of crypto in 2019 is now offering a product to compete with other major firms. In a few years, every single asset manager, banking institution, and financial service company will be involved in crypto. If major money managers are joining in the depths of the bear market, then the sky is the limit.
Ethereum’s 7th Anniversary
We're celebrating the anniversary of the #Ethereum genesis block! Seven years and billions of transactions later, the network supports a thriving ecosystem of smart contracts, payments and more. Explore our primer for investors: $ETH $ETHE
A lot has happened since Frontier, which was the name of Ethereum’s 2015 launch. In just 7 years, Ethereum has survived a massive hack (DAO hack), undergone a contentious hard fork ($ETC), and climbed its way up the charts to the #2 position by market capitalization. And the most important moment for Ethereum is now only a few weeks away…
Ran Neuner: Losing Over $100 Million With Luna Helped Me Reevaluate My Life | Crypto Banter
Podcast - The Wolf of All Streets
What does it feel like to lose over $100,000,000 in two days? Ran Neuner, the founder of Crypto Banter, talks about how he built the first crypto show on TV, what makes Crypto Banter different, his record losses on Luna and UST, and how he 10x’d his business in a bear market. This is inspiring stuff - a must-watch for anyone who trades crypto markets.
In this episode with Ran, we discussed:
  • Introducing Ran Neuner
  • The 1st TV show on Crypto Markets
  • Youtube Crypto Shills
  • Live, 24-7 Credible Crypto Streaming
  • What is Banter?
  • There’s No Money In YouTube, But There’s Community
  • Losing 9 figures in 1 Day on Luna
  • How Crypto Banter 10x’d in a Bear Market
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My Recommended Platforms, Tools And Podcast Sponsors
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Follow me on Twitter at @scottmelker. This is where I am constantly updating my trades and sharing ideas.
On-chain and fundamental analysis, research, predictions and indicators, all in one place. Highly recommend.
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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