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The Wolf Den #576 - Make It Obvious

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September 9 · Issue #576 · View online
The Wolf Den Crypto Newsletter
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In This Issue:
  1. Make It Obvious
  2. Bitcoin Thoughts And Analysis
  3. Bitcoin Illiquid Supply Increases, ETH Speculation Rises
  4. Altcoin Charts
  5. Legacy Markets
  6. Will The Whitehouse Ban PoW Mining?
  7. Coinbase Is Suing The Treasury Department
  8. The Queen Used As A Cash Grab
  9. My Recommended Platforms And Tools
Make It Obvious
HODLERs want you to believe that there is only one way to invest, which is to make a blood pact with the Bitcoin gods to never sell. Ever. No matter what.
For the rational investor, there are a million reasons to sell various assets at different times. That said, it is hard to execute and rarely clear at the time. I present what I call the “make-it-obvious-method.
Every investor should have a figure in mind where it becomes blatantly clear that they will start to take profit. This figure can be based on multiples, price points, or percentages. The only rule is that it must be obvious.
Now before the mob light their torches, I want to clarify a few points. For this method to make sense, a few factors have to remain constant. First, this method works only if the investor is planning to invest for a long period of time. Second, you do not have to liquidate your entire position - you can take partial profit at various levels and hold the rest until the 12th turning. Third, if narratives, fundamentals, or regulations shift and your foundational investment thesis is violated, then it makes sense to abandon ship.
If you are on a long road trip and your vehicle catches fire, you will get out of the car… fast. Investing is the same.
“Obvious” top signals come in many forms. Are you itching to share your earnings with friends, family, and the internet? My favorite top signal is when you show your spouse your portfolio highs. Obvious. Are crypto gains dominating every news station, billboard, and social media post? Obvious. Are absurd price predictions appearing everywhere? Obvious. Are narratives shifting overnight i.e. Bitcoin becomes the “currency to end all currencies” or “new world reserve currency?” Obvious. Is the entire internet adding laser eyes to their profile pictures? Obvious. Did your barber or Uber driver try to sell you on a hot crypto or stock tip? Obvious.
The challenge with “obvious” is that common sense goes right out the window during the bull market. When it becomes an obvious time to sell, investors and traders tend to do everything but that, because they are convinced that it is too early and the FOMO is stronger than the force in Star Wars.
The same is equally true for buying. Investors will buy 9 day old moldy hamburger buns because they are 80% off, but shy away from the idea of purchasing their favorite asset at an extreme discount. If it’s always obvious in hindsight, then it should be obvious in real time as well. That’s what this newsletter is preparing you for - to strike when it’s obvious. 
Everyone’s “obvious number” is completely different, based on their financial need, time in the market and general strategy. Figure out what’s obvious for you.
HODLERs and naysayers will mock you, but it won’t matter if you’re on your way to the bank to cash out your profits.
Bitcoin Thoughts And Analysis
DAILY CHART
Bullish divergence with oversold RSI remains by favorite indicator of all time. If you are patient, you can wait until these appear and hit soldi trades with a high rate of success.
As you can see, price did in fact rise after confirming the divergence. Now we want to see price above $21,571 to avoid hidden bearish divergence, where price makes a lower high while RSI makes a higher high.
Pretty cool, right?
Bitcoin Illiquid Supply Increases, ETH Speculation Rises
This report is written by Daniel Ferraro.
Bitcoin Illiquid Supply Increases
Even as Bitcoin struggles to sustain above $20k, the illiquid supply continues to push toward new highs. At IntoTheBlock we call Long term Holders (HODLERS) those addresses holding BTC for more than 1 year, effectively making them addresses with an accumulation and not spending pattern.
Since the recent lows in July of this year, this illiquid supply held by long-term holders has increased from 12.63m BTC to 12.95m BTC, showing explosive growth of over 300k BTC.
The reaction of long-term holders amid the uncertainty in the market has only been increasing, as it continues to hit new highs.
ETH Speculation Rises
With the merge just around the corner, the price action surrounding ETH has been increasing considerably over the past couple of days, as we are expecting high volatility previous to and shortly after the merge happens.
The action of the perpetual swaps side has been gradually increasing, as the number of open positions is approaching $12 billion for the first time in over 3 weeks.
  • This increase in the Open Interest, alongside a 9% increase in volume suggests that speculation is rising with more investors moving positions to ETH as they want to capitalize on both ETH and the ETHW fork.
  • This action might unwind rapidly after the merge happens, as investors might want to get back to safer assets.
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.
BITCOIN DOMINANCE
We can look at Bitcoin Dominance for clues as to how altcoins will perform relative to the king. As I have been pointing out, Dominance is at support with oversold RSI. You can see above what happens when RSI is overbought or oversold. As expected, we are seeing Dominance pump, meaning that alts are likely losing value against Bitcoin while their USDT values remain constant or slightly up. If you are using alts to stack sats, be careful.
Legacy Markets
DXY (DOLLAR INDEX)
The macro dollar trend is decidedly bullish. As you know, almost all assets trade inversely to the dollar. When the dollar is strong, stocks and crypto tend to be weak.
The dollar is trading at it’s highest levels in 20 years after breaking key resistance. That said, it looks ready to correct on lower time frames.
There have been multiple “top” signals of late, even with the dollar breaking through resistance. Each candle highlighted above is a potential top signal, with long upper wicks or large bearish bodies. It is finally starting to play out today. Will the dollar continue to drop? Nobody knows - charts cannot accurately tell us what will happen in the future, especially with an asset as complex as the dollar. But some relief is seemingly in the cards.
103.82 was the key monthly resistance - the dollar could drop to that level for support, which would be a major relief bounce for assets.
MARKET WRAP
Stocks, US Equity Futures Climb as Dollar Slides: Markets Wrap - Bloomberg
“Stocks and US equity futures advanced Friday as investors assessed whether monetary tightening to tackle inflation in the US and Europe is getting closer to being priced in. A gauge of dollar strength dropped the most in a month.”
Some of the main moves in markets:
Stocks
  • The Stoxx Europe 600 rose 1.6% as of 10:19 a.m. London time
  • Futures on the S&P 500 rose 0.8%
  • Futures on the Nasdaq 100 rose 1%
  • Futures on the Dow Jones Industrial Average rose 0.7%
  • The MSCI Asia Pacific Index rose 1.6%
  • The MSCI Emerging Markets Index rose 1.2%
Currencies
  • The Bloomberg Dollar Spot Index fell 0.9%
  • The euro rose 1% to $1.0094
  • The Japanese yen rose 1.4% to 142.13 per dollar
  • The offshore yuan rose 0.5% to 6.9254 per dollar
  • The British pound rose 1% to $1.1621
Bonds
  • The yield on 10-year Treasuries declined four basis points to 3.28%
  • Germany’s 10-year yield advanced one basis point to 1.73%
  • Britain’s 10-year yield declined eight basis points to 3.07%
Commodities
  • Brent crude rose 1.7% to $90.65 a barrel
  • Spot gold rose 1.1% to $1,728.06 an ounce
Will The Whitehouse Ban PoW Mining?
White House Condemns Energy Use Of Mining Bitcoin - Bitcoin Magazine - Bitcoin News, Articles and Expert Insights
In short, the answer is almost certainly no, but crackdowns may be coming. A recent Whitehouse report (you can read HERE) has made it clear that Proof-of-Work mining is being heavily scrutinized by regulators and legislators alike.
Ethereum is just a few days away from transitioning to proof of stake, which was mentioned in the report. The timing does not seem coincidental.
As for Bitcoin, the report highlighted the fact that mining activity is increasing: “future electricity demand from crypto-asset operations is uncertain. Electricity usage can change as crypto-asset miners ramp their activities up or down in response to market value fluctuations, and as they adopt new equipment and technologies.
This statement caught the most attention: “should these measures prove ineffective at reducing impacts, the Administration should explore executive actions, and Congress might consider legislation, to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining.“ While this statement doesn’t guarantee a blanket ban on mining, it is certainly an alarming comment.
Lastly, to put in perspective how ridiculous the FUD is, take a look at the following two statements. 
Global electricity generation for the crypto-assets with the largest market capitalizations resulted in a combined 140 ± 30 million metric tons of carbon dioxide per year (Mt CO2/y), or about 0.3% of global annual GHG emissions.
Bitcoin mining is equivalent to 0.4% to 0.9% of annual global electricity usage and is comparable to the annual electricity usage of all conventional (i.e., non-crypto-asset) data centers in the world.
So a revolutionary open-source hard asset accounts for 0.3% of global annual GHG emissions and between 0.4% to 0.9% of annual global electricity usage and it’s a problem? The benefits far outweigh the negatives. It ain’t even close.
Coinbase Is Suing The Treasury Department
Coinbase bankrolls lawsuit against Treasury Department following Tornado Cash sanctions
Coinbase is funding a lawsuit against the Treasury Department following the Tornado Cash debacle. Some of the plaintiffs are Coinbase employees who were blacklisted by the sanctions. Coinbase’s chief legal officer said the following: “we saw this as a much larger problem. It sets a dangerous precedent – if this code can be designated without any limits imposed by law, any technology any tool or system could be fair game.
He likens the decision to blacklist Tornado Cash to a police chase on the highway. Imagine if the governor decided to end all highway usage because robbers once used the highways to escape. It simply wouldn’t make sense. His argument is that Americans have a fundamental right to privacy and penalizing that right is unconstitutional.
It’s always a good sign to see innovators push back against regulators. Coinbase is scoring some points with this one.
The Queen Used As A Cash Grab
Crypto Vultures Capitalize on Queen Elizabeth's Death - Crypto Briefing
Since the Queen’s passing, there have been over 40 meme coins created which are pumping and dumping across numerous chains. Queen Doge, God Save The Queen, London Bridge Is Down, Queen Grow, Rip Queen Elizabeth, and Queen Inu II are just a few.
Embarrassing. It’s no wonder that people think crypto is a joke.
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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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