Is this move over? Is it the beginning of a new bull market or are we looking for a retracement and lower lows?
Personally, I'm looking to start buying dips aggressively, which I've been doing the whole time, but I will tell you why.
And we'll dive into all the news that's informing that opinion. Let's go.
What is up everybody? Welcome to the Daily Wolf on Yahoo Finance. I am your host, Scott Melker, also known as the Wolf of All Streets.
We spent many months not talking about the price of Bitcoin because it was perpetually 60 or 61 or $62,000.
Now, of course, we need to lead with the general price action on every show.
And my messaging will probably be rather consistent until we see what plays out next.
So in case you missed it, here's what happened overnight. Bitcoin reclaims uh 81,000 but bulls face key resistance.
So no point in bringing up the charts. I'll just tell you what I am personally thinking here.
So we've endlessly talked about the reason that Bitcoin went up. Breaking above 80,000 is really important.
Now, from a technical perspective, as I've said before, you want to get above about 82,800, let's call it 83,000, to make a higher high and break all bearish market structure.
But I do want to say that a lot of the signals that we saw that were very key signs of a bottom are now showing up as key signs of a local top.
I do not think this move is over. I'm just getting excited to hopefully get to buy some dips as price drops here.
Bitcoin has a tendency to not give you the dips that you want, but that's what I am looking for. Those kind of signals are overbought RSI now.
We had almost historically high RSI on the daily chart.
We're seeing bearish divergent with overbought RSI on lower time frames, meaning that we're seeing buying strength sort of abating even as price continued up.
And we're at key levels of resistance, right? The 50 moving average on the weekly chart. We basically went right up to it and got rejected.
That's the kind of area that you would be looking for price to retrace below to gather up strength to go back above.
So, listen, I as you know, use automation to buy and sell Bitcoin, Solana and Ethereum using Arch Public.
Uh it sold some Bitcoin here above 80,000 and I'm assuming that if we get a nice dip, it's going to start buying down in the low 70,000s, right?
We had that breakout above the 200 MA on the weekly, that was around 69,000.
If we get a retracement there, that looks like an extremely compelling dip to buy, but personally I'll start buying again here in the uh mid 70s.
But I'm buying all the time. So, that's the real story here.
But listen, I mean, we had a 25% rally uh in under a week, a bigger rally on some all coins, it would make a lot of sense for us to get a healthy reset here.
And frankly, if you're watching price and you're a technical analyst, what you want to see when you're buying an asset and it goes up massively is for it to go back and test key levels to reset, to gain strength.
If it goes straight up, it ends up coming more aggressively straight down into the future.
So listen, uh we can uh we can stay overbought here for quite a while.
Bitcoin could do what Bitcoin's going to do, but don't be surprised if you see some retracement here, right?
That's really the uh prevailing narrative I want to get. Now we have some very good news in the non-bitcoin world right now.
Grayscale launches Zcash ETF following the critical privacy flaw that rocked the cryptocurrency. So, Zcash has been one of the hottest narratives uh in crypto.
It's one of the few coins that really outperformed the bear market. It went up making new highs uh throughout the cycle and now testing even the all-time highs from previous cycles.
And it was on the narrative that privacy was going to become increasingly more important just not just for individuals, but for institutions as well.
My guest Avi Fellman on my morning show actually made a great point when he was asked why Zcash went up, and he said, you want to use a token like Monero if you want privacy.
You want to buy Zcash if you want to invest in privacy. and I thought that was an exceptionally good point here.
Now, I wrote about this in my newsletter today here. Wall Street is about to sell you privacy. So there's some irony here, right?
If this is great for Zcash, it's gone up, it has some huge proponents behind it.
But Zcash is about privacy and selling it on Wall Street is probably the least private thing that you could ever do, right?
I mean, this is the least private possible way that you could own Zcash and exposure to the privacy narrative.
But think about what happened with privacy coins over the past few years, right? I mean these things, Monero, Zcash, others, they were delisted from exchanges all around the world. Governments were attacking them because they didn't believe that you should have privacy and that these were only for criminals or for money laundering.
And now crypto has come so far that a privacy coin is being listed in an ETF wrapper on the stock exchange.
I mean, it really is a pinch yourself moment that we've possibly come this far. So for for the technicals of what happened, Grayscale already had a Zcash trust, and that's converting into a New York Stock Exchange Arca ETF. It'll be under ticker ZCSH.
which is just Zcash if you take out the A, which is, as you know, uh if you want to be successful as a DJ, you come up with a name and then you remove the vowels.
That's what big DJs do.
Um, and so this conversion introduces creations and redemptions, which should eliminate the trust historic premium and discount problem.
Now, the management fee is an astounding 2.5%. This will be a very, very expensive way to gain some exposure here.
But listen, it's this is this is great news for the crypto market. For all those who have been holding Zcash, congratulations.
Uh I am not one of you. I missed the boat on this one, if that's how you want to say it. Was was not something that uh I found particularly compelling, but clearly, price has spoken, Wall Street has spoken, and the era of being able to invest in an ETF rapper in privacy is officially here.
Now, speaking of different rappers to invest in things, we got our next story here. Coinbase puts US stocks on Base.
This is tokenized stocks to their own Ethereum L2, which is called Base. and this is actually really interesting.
Now we've kicked around all the different ways that we're seeing tokenization come into play, the different ways that people are deciding to wrap these or to give exposure to tokenized versions of equities.
This is one of the purest plays that you can actually get if you look at the mechanics of it, right?
But this is the interesting part. Each token is backed one for one by a real share held in regulated bankruptcy remote custody.
Holders have a direct senior claim on the underlying stock, not merely synthetic price exposure. This is not just a wrapper that gives you exposure to the price.
You get the voting rights and all the underlying protections of owning an actual share, which I just find extremely extremely interesting.
They uh use a platform called Alpaca, which is a regular regulated broker and custodian to give you that direct claim.
Now if you're wondering how this actually works because it's even above my head, the initial offering includes fractional shares of Apple and Nvidia that users can hold in self-custody wallets, trade on Aerodrome or use as collateral on decentralized lending protocol Ave.
The tokens can also be added to liquidity pools, automated portfolios, indexes and derivatives.
I find this absolutely fascinating to be honest because this is really not only giving you exposure to a tokenized stock, but giving you access to the full suite and power of Defi utilizing that like you would have used a crypto token in the past.
I think that this is likely the compelling future of what tokenization can offer.
So listen, this is small, right? I mean it's Coinbase giving it to you on base.
Americans are not allowed to use that because we hate fun and we have too much regulation.
So, you know, like America created Apple and video, created Coinbase itself and everyone uh but Americans gets this new product.
But this is what the future is going to look like when we see the all all, you know, all-in-one everything apps we've talked about and everything becomes tokenized and utilized.
You'll be able to take your stocks on chain and be do be able to do everything and more than you can do with those very stocks when they are off chain.
I find this really actually uh incredible, not the news itself, but the pace at which this is happening and the things that you will be able to do with these tokenized assets.
So I'm going to take a much deeper look at this personally, not just a news story because I think that this is a hint as to what the future is really going to look like.
Next story here. Hyperliquid policy center urges SEC, CFTC to harmonize rules for for for perpetual contracts.
Hyperliquid absolutely exploded over the past few years offering decentralized perps, right? The product that we saw created by Arthur Hayes over at Bitmax and then which exploded throughout crypto over the past decade, the perpetual swap.
obviously, made now even more popular on decentralized rails with Hyperliquid when people realized that you could trade things other than crypto using perpetual swaps.
So, Hyperliquid absolutely blew up when gold and silver started flying and then on the oil trade and then of course being able to use these exact same perpetual contracts on pre-IPO SpaceX.
And now, it's to the point where less than a week ago you had the president giving a press conference and saying that Mike Seelig from the CFTC is working very hard to bring Hyperliquid on shore.
Right? The the pace at which this is uh moving forward is rapid and of course the Hyperliquid policy center wants to make sure that that is done in a legal and regulatorily uh prefer uh, you know, a positive environment.
So listen, I didn't even know that Hyperliquid had a policy arm that's lobby lobbying here, but they do.
And they say regulators should classify each product by its economic structure, not simply by whether it references a stock or cryptocurrency. So looking for the SEC and CFTC to come together and give sensible regulation on perpetuals contracts as a whole rather than diving into exactly what the perpetual contract is on.
They say equity perps that function like futures could potentially be regulated jointly as security futures.
Just to put some numbers on this. Hyperliquid process roughly 3 trillion in notional volume in 2025 and already 1.5 trillion through August 23rd.
So, if you haven't been following along, the CME and other incumbent exchanges are resisting the arrival of crypto style perpetual markets. They don't think that these should be offered by the CFTC or regulated.
The CME in particular has been very, very loud about these especially since they came to Kalshi.
So, we're going to keep tracking this, but we're in this regulatory legislative gray area that I keep talking about where these products and platforms are innovating at a tremendous rate and there's no way that the government can keep up.
Uh it would be nice to see these regulated in a sensible manner.
Now we're going to tell a couple stories of stupidity, which is what we like to do here. Cosmos labs confirms Cosmos EVM incident as three chains disclose.
Sorry, I fell asleep when I was reading about more exploits in crypto.
So I told you how not to invest talking about Mantra trade yesterday. That was the first one.
Well, now there's three of them and they've pointed out the fact that it was not their platforms that are being exploited or hacked or having problems but it was actually the Cosmos hub EVM, which means Ethereum virtual machine, which are words I hope none of you ever have to learn in the future because crypto does not work when we get bogged down in the technicals and nuance of how it works and we know that all these things are going to be exploited.
Cosmos was one of the darlings of previous cycles. I actually thought that it uh was incredible to make uh chains interoperable, but now they're saying to all the chains that are using the Cosmos ETM, EVM to stop stop mining blocks.
Slow your roll, guys. Stop your blockchains for a while until we can figure this out.
Listen, this isn't a how not to invest today per se, but uh it is showing you once again that you need to be very careful about where you put your crypto because some of these chains are basically zombies at this point.
I mean the multi-chain future that uh Cosmos believed was going to happen, it's arrived, but unfortunately several chains are pressing pause together in that multi-chain future.
And now we do actually have a how not to invest. Hit it.
How not to invest? How not to invest?
Remember when we told you about the dangers of leverage and specifically what South Koreans were doing with SK Hynix and Samsung, selling off their insurance and their savings so that they could buy exposure to their favorite AI trade through leverage ETFs.
Well now, and I'm not not I'm not bocking I'm mocking Binance for offering the product. I think everybody should be able to do whatever they want.
But you should you should not be doing this. What they're offering 20X perpetuals tied to Trump Media, Moderna and three leverage semiconductor ETFs.
So to be clear, two of those are the 2X long and 2X short SK Hynix ETFs that I told you about before that the South Koreans were going crazy for.
They were all the rage before their stock market crashed multiple times, right?
Uh, you can now buy a 2X long or short ETF on SK Hynix using 20X leverage.
It was already a bad idea when the South Koreans were uh trading these volatile assets with 2X leverage. Now you can effectively do it with 40X leverage.
If you do this, your parents will disown you, your kids won't love you, and you will be broke and homeless on the street by yourself.
Okay, maybe it won't be that bad, but consider this a cautionary tale. Don't use 40X leverage.
That is all I have for you today. I will see you tomorrow on the next Daily Wolf.