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The Wolf Den #574 - Tips For Investing With A Small Budget

September 7 · Issue #574 · 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. Tips For Investing With A Small Budget
  2. Bitcoin Thoughts And Analysis
  3. Legacy Markets
  4. What Does The Merge Mean For NFTs?
  5. Next Step - The Merge
  6. No Crypto Ads On Netflix
  7. My Recommended Platforms And Tools
Tips For Investing With A Small Budget
Newcomers to markets often think that they need tens of thousands of dollars to make their first investment or pursue a certain investment strategy.
This is a popular line of thinking: If I can’t afford a full Bitcoin, then I’ll buy a few Ethereum and if I can’t afford that, I’ll look to acquire a large number of alts… or maybe I won’t bother at all.
In today’s intro, I am going to briefly cover a few ways in which beginning investors can make the most of their capital.
Let’s begin.
Lower Your Fees
Coinbase users have complete access to Coinbase’s professional trading service, which is far cheaper than the more popular part of the platform. Use your exact same login information and you will save money on virtually every trade… and fill your orders at more precise price levels. Convenience costs money.
Ditch market orders and start placing limit orders. Advanced traders let prices come to them. If they miss, they move on. Try setting limit orders before you go to bed for better results.
There are a multitude of ways to save money in DeFi. Swaps can be expensive, so smart traders are active at times when the network has less activity. Use DeFi platforms when gas is cheap… you know, like NOW. You can also use cheaper networks.
Not all loans are created equal. If you are looking to post your crypto as collateral, find a competitive rate while utilizing the “safest” platforms. If you like discounts in real life, then get creative and find them in crypto as well.
Don’t Quit Your Day Job
If you have been in crypto for a while, then you know that disaster can strike at any time. It is essential that you have multiple sources of income and a steady to job to allow you to invest wisely and with minimal pressure.
A strong safety net is essential. Quitting your job to become a crypto trader is likely to be the end of you financially.
Adopt A Learner’s Mindset
Are you taking advice from the wrong people? Are you convinced that there is only one right way to navigate the market? Do your emotions get in your way? Do you change opinion when presented with new information or are you stubborn? These are just a few questions we should be asking ourselves occasionally to avoid major pitfalls.
You should always be humble and learn from the market. There are thousands of ways to skin this cat, so take the time to DYOR and find the strategy that works best fore you. Move slowly.
Set A Framework
Find a strategy and stick to it.
Are you looking to preserve previously acquired wealth or to grow a small portfolio. Are you aggressive or conservative? Are you strictly investing or using some of your portfolio to trade?
Newcomers are more likely to take big risks to get established. Investors with years of experience and a sizable portfolio are less likely to risk everything in the altcoin casino. Regardless of portfolio size, everyone should incorporate dollar-cost averaging into their strategy. Passive usually beats active.
If you know what strategy suits you best, double down on it. Warren Buffet knew that he was only good at managing a handful of positions at a time. He has always avoided managing a complex portfolio. Arbitrage traders know arbitrage, so they aren’t worried about inflation or macro narratives. High-frequency traders don’t need to learn the skills required of seasoned value investors. Know your lane and master it. You don’t need to be a jack of all trades. Better to be a master of one.
Investing with a small portfolio can be fun and profitable, as long as you have a plan and are always open to new information.
God speed.
Bitcoin Thoughts And Analysis
Key weekly levels are marked, if you are looking for areas that Bitcoin might bounce if it continues down. As you can see, failure to hold the 200 MA as support was a solid signal that more downside was likely. We still have a series of lower highs and lower lows, with the last lower high around 25K unconfirmed. Conformation comes in the form of a fresh lower low.
The good news? If we get another lower low, then breaking bearish market structure would only require a break of 25K instead of 32K to make a higher high.
There are monster potential bullish divergences with oversold RSI all over the place, including the weekly chart. Large time frame divs take forever to play out and this is not yet confirmed. We would need to see a lower low on price, a higher low on RSI and then a clear elbow up on RSI.
Regardless, weekly RSI has literally never been this oversold before, so a bullish divergence here would be a great long term signal.
Bitcoin price has not tested the recent lows again… but yesterday was the lowest daily close since December, 2020. Not good.
I have been using the Ichimoku Cloud again of late for fun, as I often come back to old indicators in my search to avoid boredom. As I have pointed out, there is nothing bullish on this indicator, and we recently had a bearish TK Cross (blue line crossing below brown line) below the cloud, which is a signal to go short. That played out for sure.
Most traders are looking for a sweep of the $17,600 lows now - meaning a wick below to find liquidity. Would that be the bottom? No way to know.
There is potential bullish divergence with oversold RSI on the daily chart. We need to see a clear elbow up on RSI to confirm, but this would be a solid signal that Bitcoin is bottoming.
Legacy Markets
US Futures Edge Up; Dollar Strength Sets Records: Markets Wrap - Bloomberg
What to watch this week:
  • Apple event due to feature new iPhones, watches, Wednesday
  • Bank of England Governor Andrew Bailey at Treasury Committee, Wednesday
  • Fed’s Beige Book of regional economic activity, Wednesday
  • Cleveland Fed President Loretta Mester due to speak, Wednesday
  • European Central Bank rate decision, Thursday
  • Fed Chair Jerome Powell due to speak, Thursday
  • Chicago Fed President Charles Evans and his Minneapolis counterpart Neel Kashkari due to speak, Thursday
  • EU energy ministers extraordinary meeting on emergency intervention in electricity markets, Friday
Are you bullish on energy-related assets? This week’s MLIV Pulse survey focuses on energy and commodities. Please click here to participate anonymously.
Some of the main moves in markets:
  • Futures on the S&P 500 rose 0.2% as of 6:24 a.m. New York time
  • Futures on the Nasdaq 100 rose 0.3%
  • Futures on the Dow Jones Industrial Average rose 0.1%
  • The Stoxx Europe 600 fell 0.5%
  • The MSCI World index fell 0.3%
  • The Bloomberg Dollar Spot Index rose 0.2%
  • The euro was little changed at $0.9901
  • The British pound fell 0.3% to $1.1490
  • The Japanese yen fell 1.1% to 144.37 per dollar
  • The yield on 10-year Treasuries declined three basis points to 3.32%
  • Germany’s 10-year yield declined six basis points to 1.57%
  • Britain’s 10-year yield declined nine basis points to 3.01%
  • West Texas Intermediate crude rose 0.6% to $87.44 a barrel
  • Gold futures rose 0.2% to $1,716.30 an ounce
What Does The Merge Mean For NFTs?
The Ethereum Merge Is Almost Here, What Does It Mean For NFTs
Does the merge mean that I will have two Bored Apes instead of one?
Probably not. Most developers anticipate that nothing interesting will happen, although there is a low change that NFTs could be duplicated.
This is what OpenSea has said regarding the merge, “first, and most importantly, we are committed to solely supporting NFTs on the upgraded Ethereum PoS chain. While we won’t speculate on potential forks–to the extent forked NFTs on ETHPoW exist–they won’t be supported or reflected on OpenSea.”
Yuga Labs and Proof have also announced their support for the merge while showing complete disinterest in a hard fork. This won’t stop scammers from doing their best to fool victims. Fraudulent transactions and scams will likely spike post-merge as scammers capitalize on misinformation and new opportunities.
Such is crypto.
Next Step - The Merge
Ethereum activates Bellatrix upgrade as last step before The Merge
Ethereum’s final upgrade prior to the merge was a success, meaning the only thing left to do is merge the chains. Validators included the following text: “Welcome to the New Beginning.” This has been a popular catchphrase in the community. Let’s get this done.
No Crypto Ads On Netflix
Netflix Won't Allow Crypto Ads, Here's Why! |
Netflix will not allow crypto companies to advertise on the platform. Included in the general “ban” are ads relating to politics, gambling, pharmaceuticals, and children’s products. This is a curious decision, considering the budgets of crypto companies and that these commercials played on mainstream networks - and during the Super Bowl.
Netflix stock has dropped over 60% this year.
That stat is not relevant, but I felt like it was worth kicking them while they are down.
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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