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The Wolf Den #577 - Merge Week

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September 12 · Issue #577 · View online
The Wolf Den Crypto Newsletter
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In This Issue:
  1. Merge Week
  2. Bitcoin Thoughts And Analysis
  3. Altcoin Charts
  4. Legacy Markets
  5. Apple Is The Market
  6. Google Search “The Merge
  7. Is Binance.US Supporting An Ethereum Fork?
  8. Crypto OG Dan Held Talks About Bitcoin
  9. My Recommended Platforms And Tools
Merge Week
Merge week is here. I would be lying if I said that everything would be fine for crypto in the short-term if the merge failed. It is the only significant narrative currently dictating crypto prices from within our bubble.
The merge is expected to take place between September 14 and September 15th. I won’t speculate as to whether or not this will be a “sell the news” event or not. I do believe that if the merge fails, we would see some serious downside.
Outside of the merge, we have few dominant narratives. There probably won’t be a Bitcoin spot ETF anytime soon. MicroStrategy is seemingly the only company adding Bitcoin to their balance sheet and they are turning everything on its head to do so. Bitcoin is not currently acting as a hedge against inflation. Crypto continues to trade as a high-beta risk play. The majority of regulators still hate us.
This is not a pity party, just reality. This is what happens in the depth of the bear market before new narratives arise or old ones find new legs.
Will all of this change in the not-so-distant future? Absolutely. But right now we are at the mercy of macro: inflation, interest rates, looming recessions, energy crises, geopolitical tensions, a frothy housing market, and rising debt.
What do we have on tap for this week? On Tuesday at 8 am EST, the U.S. Bureau of Labor Statistics will release August’s CPI numbers. If you recall, May came in at 8.6%, June at 9.1%, and July at 8.5%. Since the price of gas has dropped significantly in the US and the White House has failed to make any grand statements warning us of poor numbers, it is expected that things will continue to improve.
After the inflation numbers hit, the next event that is likely to impact crypto will be the FOMC rate hike decision on the 21st of the month. We can expect it to play out like this: elevated inflation = stronger hike = risk-off sentiment = sell crypto… or controlled inflation = weaker hike = risk on sentiment = crypto bid. Crypto is currently at the bottom of the food chain, at the mercy of the larger predators in the forest.
With all of that said… don’t count crypto out, because it won’t remain dormant forever. The patient will win, and Bitcoin will become the alpha predator.
Bitcoin Thoughts And Analysis
WEEKLY CHART
Beautiful weekly candle. Not only does the candle have a long wick down and massive bullish body, but it happened at a key support with an outside reversal, also known as an outside bar. Many also refer to the candle as bullish engulfing.
From investopedia: An outside reversal is a price pattern that indicates a potential change in trend on a price chart. The two-day pattern is observed when a security’s high and low prices for the day exceed the high and low of the previous day’s trading session. Outside reversal is also known as either a bullish engulfing (after a downward price move) or a bearish engulfing pattern (after an upward price move) when observed on candlestick charts.
Either way, this is the candle bulls have been dreaming of, which “should” indicate a market bottom, at least for a while. $18,500 is looking like the first higher low after the market crash to $17,600.
The 200 MA still looms ahead, alongside a lot of other key resistance levels. Too early to celebrate, but an encouraging week.
DAILY CHART
As you know, we had confirmed bullish divergence with oversold RSI on multiple time frames. On the daily, the potential hidden bearish divergence we were discussing has been invalidated, as price made a higher high alongside RSI.
Nice.
Legacy Markets
Stocks Extend Rally as Dollar Pauses, Oil Slides: Markets Wrap
“European stocks and US futures extended a rally and the dollar retreated as traders bet inflation is near peaking even as policy makers ramp up hawkish rhetoric.”
“Should tomorrow’s CPI data show a notable moderation in price pressures, the market’s defiance of the Fed’s forward guidance may gain some support, to the benefit of relatively higher-risk assets,” Rand Merchant Bank economists said in a note Monday. “Having said that, the risk remains that the Fed sticks to its hawkish guns as inflation may remain well above levels that it is comfortable with for a prolonged period of time, meaning it may still be premature to bet against further US dollar strength at this time.”
Here are some key events to watch this week:
  • US CPI, Tuesday
  • UK CPI, Wednesday
  • US PPI, Wednesday
  • US business inventories, empire manufacturing, retail sales, initial jobless claims, industrial production, Thursday
  • China home sales, retail sales, industrial production, fixed assets, surveyed jobless rate, Friday
  • Euro area CPI, Friday
  • US University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
  • The Stoxx Europe 600 rose 0.9% as of 10:15 a.m. London time
  • Futures on the S&P 500 rose 0.6%
  • Futures on the Nasdaq 100 rose 0.7%
  • Futures on the Dow Jones Industrial Average rose 0.5%
  • The MSCI Asia Pacific Index rose 0.7%
  • The MSCI Emerging Markets Index rose 0.7%
Currencies
  • The Bloomberg Dollar Spot Index fell 0.6%
  • The euro rose 1.4% to $1.0181
  • The Japanese yen fell 0.2% to 142.73 per dollar
  • The offshore yuan rose 0.4% to 6.9127 per dollar
  • The British pound rose 0.8% to $1.1684
Bonds
  • The yield on 10-year Treasuries declined two basis points to 3.29%
  • Germany’s 10-year yield was little changed at 1.69%
  • Britain’s 10-year yield was little changed at 3.09%
Commodities
  • Brent crude rose 1% to $93.73 a barrel
  • Spot gold rose 0.6% to $1,726.40 an ounce
Apple Is The Market
Alf
Apple's market cap alone is equal to the sum of the bottom 180 companies within the S&P 500.

Impressive and scary at the same time. https://t.co/Rq9zF2Pbx3
Apple is a monster. Its current marketcap is about $2.5 trillion, down over $500 million from when it broke $3 trillion back in January. The bottom 180 companies in the S&P 500 are collectively equal to Apple, which means the bottom 36% of the entire S&P is equal in size to Apple. If you wonder why Apple earnings mean so much, this is your answer.
Google Search “The Merge”
Seriously, to go and Google and search, “the merge.” To celebrate the moment, Google has added a countdown timer based on difficulty and hash rate. Even after the merge, I expect the event to continue to be the most talked about “thing” in crypto for the foreseeable future. Stakers will pile in, ETHPoW should be distributed, and issuance drops will be tracked, leaving analysts with much to discuss. Ethereum has put the entire crypto space on its back.
Is Binance.US Supporting An Ethereum Fork?
Binance Confirms Support for Post-Merge Ethereum Fork - Crypto Briefing
There has been a lot of confusion as to whether or not Binance.US (not Binance) is supporting forked tokens. The confusion is the result of major news outlets failing to make the distinction between Binance and Binance.US. The two are different entities.
I have a blog (HERE) that states precisely what is going to happen.
In the event that there are new forked tokens that result from the merge, the same rigorous evaluation process that any digital asset undergoes to be listed on Binance.US will be implemented. Binance.US will credit the forked token from the PoW chain at a ratio of 1:1 to customers’ accounts, based on the snapshot of ETH balances before the “Paris” upgrade outlined in the section below.
My assumption based on the above is that Binance.US users should receive ETHPoW, but the ability to sell them on the exchange is not yet guaranteed.
MicroStategy Will Stop At Nothing
MicroStrategy Files to Sell Up to $500M of Stock to Fund Bitcoin Purchases
Michael Saylor stepped down as CEO, but it clearly has had no effect on the company’s Bitcoin strategy. A Friday filing from the SEC revealed that the company is in the process of selling $500 million worth of company-held shares to buy Bitcoin and accomplish “general corporate purposes.” Bitcoin investors rejoiced, but we currently have no idea how much of the $500 million will be allocated to Bitcoin. Since his crusade began, Saylor has spent over $4 billion to acquire his 129,699 mega position.
He will not stop.
Crypto OG Dan Held Talks About Bitcoin
Podcast - The Wolf of All Streets
This interview with Dan Held is the last episode recorded at Consensus 2022 in Austin, Texas. We talked about everything: Dan’s shoes, Kraken’s path to a banking license, Bitcoin’s role in Ukraine, competition in crypto, and how long Bitcoin will be correlated to traditional assets.
Important notice: Dan was still at Kraken when we recorded this interview in June 2022 during Consensus. As of September 2022, Dan is no longer with the company.
In this episode with Dan, we discussed:
  • Dan Held and his shoes
  • Banking license for Kraken
  • Why Dan Held still cares about crypto?
  • Bitcoin: growth drivers
  • Bitcoin & the war in Ukraine
  • Competition in crypto
  • Advantages of the bear market
  • Correlation with other assets
  • Why traditional media only talks about Bitcoin in terms of price price 
  • Volume is more important than price
  • Bitcoin DeFi
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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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