SotN #49- The State of the Charts, with Ledger Status

Transcript

hey bankless nation welcome to another state of the nation david how you doing today absolutely fantastic ryan except the market is not feeling all that fantastic even though i am uh and that is what we are going to talk about today today is our first ever charting and technical analysis episode uh neither you or i are at all like ta people um but people have been like asking for a lot of clarity as to like what the hell is going on in the markets is the bull market over or is this just like you know a pause a seventh ending stretch uh hopefully not seventh-day stretch maybe a third any stretch i don't really know but we're gonna get into that in today's episode because we brought on ledger status from

the ledger cast podcast and also the up only podcast and he's somebody that um i've been getting close to in this last uh like 12 months uh he's he's the the guy that i go to to just kind of like put the charts on my face and try and kind of get a feel for the market uh and so i've always appreciated his content and so we have two podcasters coming together you want to hear something funny david tell me around i have not even looked at the price this morning like i haven't even looked at oh you don't know what's going on then huh i don't know what's going on what like what price is bitcoin what price is he uh bitcoin's at like 33 000. each is at twenty three hundred dollars you know and some change um i mean i know nowhere

near where we were like two weeks ago but like people don't like being down this low right well this is just it so dave david i i know we do look at the price like more than once a day certainly but like neither of us are traders that's why it's it's really cool to get ledger on because i feel like i'm gonna ask all the explain it like i'm five type of of questions right like is this ta thing is it horoscopes is there something else to it explain it to us i've heard a lot about this bitcoin death cross thing i want to hear ledger's take on all of this so it's definitely going to be an interesting episode i feel like i'm going to learn a lot and i can't wait to see ledger pull up some charts and like show us how they work show us how a ta

trader looks at some of these recent price moves all right david we've got some other things going on in the bankless nation we should talk about them the first is we are looking for an editor and a writer bankless nation if that is you send your interesting writing d5 writing to applications at banklesshq.com there will be a link in the show notes to a job disc for a job description talk to a lot of people we are looking for the perfect passionate defy user slash editor writer to help with the newsletter really cool position if that sounds like you send us your info

about that yeah i wrote the article the future of work in the bank list newsletter last week it was mostly focused on dows and bankless llc is not a dow but there's still some things that you can take we work for protocol working for bankless llc is dope uh so it's gonna be a good time uh whoever lands that position so if you are an organized individual who can manage a newsletter and also are defy minded and can write well like you want this job you definitely do all right uh we also had vance spencer on last week but we put out the recording on monday vance spencer he that was our original d5 bull case and vance is like a crypto native defy investor who like has caught all of these trends just a phenomenal episode

david any words you want to say about that one yeah van spencer the bull case for d5 episode number one held the number one most downloaded episode spot on the bankless podcast for the longest amount of time uh he eventually got dethroned because the bankless podcast grew but we wanted to give him another shot to getting back on the number one spot and uh so far so good uh and so there's also a reason why it was the number one downloaded because vance spencer tends to get things right uh and so that oh that first episode was nine months ago we just recorded the second one and so uh hopefully van spencer gets back onto that number one slot and also hopefully he is just as right as he was nine months ago for the next nine months spoiler vance spencer is still bullish

on d5 that's for sure all right last thing guys of course we wanted to let you know about this opportunity with kyber let me share the screen so kyber has just come out with a dynamic automated market maker so they call it a dmm what that basically means is they take sort of oracle price feed information into their liquidity pools and they really optimize yield for liquidity providers so we think you should go check this out you could do that at bankless.cc kyber and get ahead they're going to be doing some liquidity mining a little bit later that's coming soon we'll update you on that when it happens but you can front run that opportunity and get used to using this system as a liquidity

provider kyber's like one of the og automated market makers in the space and what they've built here is super cool so uh this is an opportunity for you guys to try it out and get ahead of what they're doing with their liquidity mining program um with that david i gotta ask you the question i always ask you at the start of these episodes which is this what is the state of the nation today my friend the state of the nation is charting we are charting uh and like all good state of the nations it has more than just one meeting we are literally going to pull up charts and look at them and do charting stuff but also we are charting a path into the future trying to get some clarity as where does this market go uh and so in the ever and never

ending quest on going westward we are charting west and also you might notice that my background is uh different uh lately because i am charting my way south uh and so this time next week i will actually be in san diego uh charting a new path uh and so that's why my background is not as composed as it usually is because your boy's moving your boy's chart oh my god triple meanings there david short-term charge and you worked in like the d5 journey and then you worked in your move all in one state of the nation wow state of the nation are you keeping some of those plants my friend are those plants coming with you uh i might have to drop some plants off at my parents hmm oh sad yeah but they're oh no they like plants too

but you're gonna like buy on the other side once you get south san diego oh yeah your stock up mm-hmm mm-hmm all right like it wouldn't be the same without the plants without the plant maximalism that you guys hear everything most of the plants are coming mostly except for this big boy he doesn't fit in the u-haul i'm sure listeners are relieved to hear that though all right guys we are going to be back with ledger in just a moment we're going to be charting the path in the future but before we do we want to thank the sponsors that made this episode possible synthetics is ethereum's decentralized derivatives liquidity protocol what does that mean synthetics is a platform for creating and trading synthetic assets which are assets that are priced via an

oracle rather than bids or asks traders can use the quenta exchange which hosts and trades all of the synthetic assets created by synthetics traders on cuenta can trade synthetic tokens like sbtc s oil or sd5 because quinta is powered by synthetics traders experience zero slippage on their trades no i didn't mean low slippage i meant no slippage because that is the power of the synthetics platform no slippage on your trades you can also easily short assets with isynths which are synthetic assets that move inversely to their target asset synthetics isn't just for traders developers can build on synthetics to access the infinite liquidity offered by synthetic assets or investors can stake

collateral to the protocol and earn fees that the protocol collects if you're a trader and you're looking for a trading platform and not found in the legacy world check out cuenta.io if you're a developer or you just want to earn yield on your collateral go to www.synthetics.io where you can stake your snx or eth and earn fees from synthetics ave is a borrowing and lending protocol on ethereum and just recently released ave version 2 which has a ton of cool new features that makes using ave even more powerful with ave you can leverage the full power of defy money legos yield and composability all in one application on ave there are a ton of assets that you

can deposit in order to gain yield and all of those same assets can also be borrowed from the protocol if you have deposited collateral here you can see me getting a 200 usdc loan against my portfolio of a number of different defy tokens and eth i'll choose a variable interest rate because it's a lower rate than the stable interest rate option but i could choose the stable interest rate option if i wanted to lock that interest rate in permanently one of ave's v2 features is the ability to swap collateral without having to withdraw your assets trade them on unit swap and then deposit them back into ave ave does all of this for you all in one seamless transaction so you don't have to repay loans in order to change the collateral you have backing them check out the

power of ave at ave dot com that's a aave dot com bankless nation we are back here with brian krogsgard he you you probably know him as ledger status that's how i know him he's a crypto trader and content producer is the host of the ledger podcast where he and his co-host go through all sorts of different charts they select different crypto assets give a view of the short-term trading perspective here while also they provide great commentary on the news cycle and how to inform future trades i'm also super excited about his other podcast called up only which he co-hosts with with kobe it's kind of unscripted raw conversations

really fun stuff just a great content producer in the space ledger welcome to bankless i think this is your first time it definitely won't be your last but it's great to have you man yeah it's a pleasure to be here i've been enjoying y'all's shows for uh i guess over a year now so um certainly since i went deep on the uh down the d5 rabbit hole um y'all do a great service though i've learned a lot from you and your guests and i appreciate you having me well look this is mutual because we want to learn a lot about uh from you on trading because that's not a subject that that we cover so often but but i am curious here so like when did you go down the d5 rabbit hole like what time was that

uh it was around i i was considered late for d5 summer but for a lot of people it was so early it was probably like july of 2020 um and i just some of the stuff going on started to click uh i should have really you know if i was even had half a brain i would have realized why things that like laid the rails for defy perform so well like the link oracle stuff like performed well throughout the bear market but things really started to click with me once i understood better about like what ave was doing and what compound was doing and when yield farming came around so i don't remember which project was first that i saw but like i saw like yams come

online and like some of the early farming stuff and curve launch and a bunch of those things and then just went from there and took a small percentage of my total uh stack and said i'm gonna this is my fun to use it or lose it and uh it ended up being like one of the best decisions ever made i think i like 100x just in that you know same year the basis and uh more than that in total and uh the trader in me then told me to rotate that back to bitcoin so like i made pretty good calls all the way until the d5 top in february on those rotations but uh ever since the summer i've been like heads down from a d5 perspective because

uh to me it was true product market fit for ethereum so that's super cool and i we're we want to get into that too and i'm also curious ledger did you go to miami last week were you there i did go to miami and i'm still i'm still in recovery i'm too old for that stuff man it's too old but you're in you're like you're you're in your 20s got to be brian oh yeah yeah sure yeah well how was it what was the experience like did you actually go to the conference or was it more like the side events no there was no conference for me i was meeting up with some friends uh in the space and getting to know people that um you know you turned an internet friend into an in real life friend david and i tried to get it together a couple times didn't

work out that was kind of like you said the story of the event and there's just so many people to meet and yeah hopefully you came across as many as you could but it was all to me it was all about relationships like i can i can watch stuff online later if it's about the content um but it it provides a great excuse to get together yeah that's okay the crypto is a conference heavy industry right and everyone has you know put that on pause during covid but like we still we still should post on twitter and we still you know hang out and telegram and so there's a lot of like pent up socialization demand that kind of got released extremely like violently all in two days and now we're all here trying to reflect

on it yeah for sure it's it's all right the ledger i i haven't yet met david in real life either so yeah it happens the uh the first conference i that was the first big conference i'd bid to i went to one small conference in 2018 where josh uh carpe knocked him he hosts ledger cast with me uh we met in person there and i met a handful of other people who i value like niraj um their eyes is awesome and dez from lightning and some folks that were local to dc but this was the first one where it was all out and i agree with you if you were to put a technical analysis term on what miami was it was like there was this long consolidation where there was no events and we were just ready for social

volatility so uh we had we had a breakout of uh of networking in miami there seemed to be some social volatility on stage too i was watching the quest what is going on in miami um yeah there's always antics like that but i mean overall it seemed like outside of a couple of issues getting people in the door with tickets and stuff the first day uh it's hard to run an event that big i think they had like 20 000 people there or something so i wouldn't envy yeah i would i don't envy what they had to do so i think no it's amazing it's amazing they were able to pull that together and like you guys were saying the first since uh since kind of coved so a lot of pent-up energy for sure all right think about this it was it was the largest event in the

world in the last 15 months other than the super bowl no way yeah well that makes sense because the covet dude largest event in the world yeah because of it everything got locked down wow i didn't realize that this is like first that's pretty incredible mm-hmm well good job good job bitcoin bitcoin conference holders good job um all right let's so let's start here we're starting to get into it as you were talking about um like defy and i just want to get the the way you think about trading versus investing down so i have kind of a mental model going into this conversation that there are basically like

three different um ways you can make money in crypto right i'm just going to throw this mental model out at you and get you to kind of like respond to it give me your thoughts the first is you can be you can trade and be a trader right uh do sort of what you're doing looking at like uh shorter term price patterns and trying to figure out how to generate alpha and make money and the second i think that's useful is you could be a narrative investor so this is maybe a bit of a longer term um it's longer term oriented than than trading and uses maybe a bit of different information we're basically doing some like meme prediction right oh layer twos are gonna be hot oh d5 summer it's you know d5 summer is here that's going to be the

next thing oh now it's eat killers so i better get some eat killers in my portfolio and you sort of try to front run the next narrative in crypto the meme maybe if trading is like uh a days to weeks to months long kind of operation narrative you know trading or narrative investing i guess is sort of a weeks to months long type of thing and then you have the third category which is the fundamentals investor is individual is kind of like i'm gonna buy and hold this thing you know three years five years long term time horizon i'm looking primarily less at the short term trading patterns but primarily the fundamentals the networks like the teams the communities the you know entry and

transaction volume all of the the developers all of the fundamentals that that make up these projects um what are your thoughts on that distinction because like my my my thesis is it's hard to be really good at all three and so like my advice is like for people who are new to the space is kind of choose which one you want to be and get good at that because what i see a lot of people doing ledger is they try to do all three at once and they end up screwing it all up right and losing a lot of money in the process any thoughts on that first yeah i think i would consider it more like a pyramid right so i am uh from a fundamental perspective i'm long crypto right or i'm like bullish on

the role that crypto plays both the coin and ethereum and some other stuff um so treat that as my baseline pyramid that i'm going to have exposure to this space uh the lower down that pyramid you go the more you have to be right though like if you're completely wrong on that you're gonna lose money pretty much across the board right and then the next one would be the narrative that's more like a rotation game um so you can be um you can you can have that right for instance it could be i think nfts are going to be a big thing well i that could be the erc 721 standard that i'm bullish on but that doesn't mean you're going to nail it like if you are you know getting into a bunch of nfts at the

same time that it's like in mainstream news and on snl and all this stuff you could still miss that rotation trade so that's that next level of the pyramid but if you're right on that narrative you have a chance to make a lot of money the top one would be purely technical momentum driven uh chart based and that's the the place where um you your your narratives and your fundamentals are the least important and it's much more about the impulses and the psychology behind the charts like oh i'm bullish on um on on d5 so i'm gonna buy eth when it's 4000 it goes down you're instantly underwater right and the the chart is just a psychology of how underwater you

are and when it is hurtful enough to you to puke it up so all the chart does is represent that much like you would analyze charts when you're doing any other type of fundamental analysis like on-chain analysis here's all the eth leaving centralized exchanges and it's going on chain it's being used in d5 that's a chart too but it's just a chart of what's occurring in a network and when you see price action on a chart the candles with price data going up and down that's just people's psychology of when are they above water when are they in profit or when are they under water and at a loss and trying to determine whether they cut their loss or not and then the degree to which they do depends on did they go all in but from the top of

the pyramid perspective but they don't really have that more fundamental thesis of the middle of the pyramid with the rotation or the bottom of the pyramid with being willing to be long crypto and you see a scenario like what dogecoin was and it's like they just see you know meme stuff they don't necessarily have any belief in crypto so they're standing on the weakest foundation they're just right up there at the top thinking hey this is going to go up i got to get in before it goes up more they don't realize other people that had a much better understanding of where the market was and the middle of the pyramid with the rotation to you know does going to go up like they were way ahead of them they they totally front ran them on that move um so they have even less foundation to stand on

and they went too heavy in at the wrong time and they have the least understanding so i actually i'm going to disagree with you a little bit i think you can combine them but you have to understand the way that you're looking at them and i know people who make a ton of money and they're only on the top portion but they are fantastic risk managers they're not going to sit there and average down forever if you're willing to average in and dca and put a percentage of your net worth in something over time because you're fundamentally bullish it's because you're fundamentally bullish you think crypto is going to replace uh existing financial ecosystems and if you don't have that fundamental bullishness eventually you're going to

puke it up when the price goes against you yeah so so ledger this is a really good mental model i think of like like thinking about it in in terms of a pyramid right and so you've got all of these different layers you can enter in you could play it one layer or you could play it all three uh and like to your point i mean you you're having a bad time now if in 2017 2018 you decided the bottom of your pyramid was eos or something like that like eos is money i'm gonna denominate all my returns in u.s you screw everything else up and that shows the risk of of that player but they're also the most right if you do it on synthetics you know what i mean true

true true okay so so so i agree with you there um let me ask you this though is it a very special person like is it a very rare breed that can do all three layers of the pyramid will because this is why it's like it's kind of like the the new entrance i feel like have this uh you know dunning-kruger effect where they have this over confidence be like yeah i could do all three i'll just sell the top whatever yeah and then they get this like they make some bets and they get overconfident because things are going well and like when they compare themselves to their traditional friends they just did it like a 5x in two months and of course i'm a genius right so can you talk about this how how much work does it take and how rare is it to get

good at all three layers of the pyramid yeah it's uh it's very rare the easiest one to play and the and oftentimes the most profitable in the long term is that base foundation of the pyramid like i'm bullish crypto i take my time i'm long crypto for a decade there's a lot of good reasons to be that way not not discounting for instance like the tax implications if you take capital gains as just a simple example if you imagine a zero cost basis if you go 10x it might as well be a zero cost basis right when you take profit on something like that you are going to owe like 40 to the tax man at a higher higher income tax bracket so therefore you have to outperform holding by quite a bit in

order to justify that because then you're starting fresh again the next year so buy hold forever dollar cost average in forever play this surge onto the world that is by far um the easiest in the sense of how to trade it and also the hardest psychologically to continue to tell yourself to hold to dollar cost average to stay in it doesn't matter how much i'm up i we still haven't hit the pinnacle like we haven't like replaced some of the systems that i believe that we're gonna replace uh so it's hard psychologically in that regard the further up you go on that pyramid the harder it is to be tactically correct

but if you're a good risk manager you can also avoid being completely wrong on the baseline narrative so like if eath goes to zero you don't necessarily get wrecked because you have a stop loss in your positions and you're willing to go back to the dollar or whatever like that a bitcoin maximalist or uh an ethereum maximalist a crypto maximalist they're never going to do that right they're going to be like screw the dollar i'm into these things that i'm in and i'm rolling on that train that's just the bet i made um the further you go up that pyramid the less they are attached to like making that bet right so then they're playing much more tactically most people are tactically not very good um so the safer place for most people is way down

at the bottom it's also the most profitable place all traders tend to screw this up at some point along the way and it's not if you come into trading actively versus long-term passive investing you should prepare to lose but it also does provide the most upside especially when you prevent some of the 70 80 drawdowns that can occur in a highly volatile environment like crypto i really like this uh pyramid model even though the youtube chat is saying stop using the word pyramid uh but like so so we have these three sections got the cap which are the traders the middle foundation which are the momentum uh investors and then we have the base level foundation and one

of the reasons why i think crypto markets have always been so volatile even and not not volatile versus the dollar but volatile in between itself right so like ether and bitcoin can be volatile in relation to themselves and then dogecoin can be volatile in relation to other crypto assets because there's like this top level swarm of like traders that hippity-hop around from different crypto assets as they are making trades right but there's that's leaving this very like um like like basal level of uh long-term focused investors and like all these traders are are trying to figure out what what to trade and ultimately they always end up where

the long-term people are if those long-term people are right right like there's a reason why there's a lot of bitcoin traders because traders feel pretty safe trading bitcoin uh because there's like this very established base of holders and that's also becoming true of ether uh and and there's also like people will still trade like we had this 2017 part of this cycle recently where all these 2017 tokens pumped uh you know like dentacoin came back this is when dogecoin started coming back uh we had all this like part of this like recent like 21 bull market that was very reminiscent of 2017 and all the traders went all the way back to the 2017 tokens that were known for going up in 2017 uh

and then they left right and like they went and went somewhere else so we have this like surface level swarm of traders that keep on pumping different tokens at different times in the crypto markets and i feel like you have the momentum traders trying to like figure out where those people are going but then ultimately where people end up and where traders end up trading is wherever the long-term investors are buying and holding who are focused on fundamentals how does that analysis land with you yeah pretty pretty well and you know the longer the technology survives the more inroads it makes into whatever it's trying to disrupt which nothing's gonna nothing's in a growth industry unless it's still trying to disrupt something right whether it's a tech stock

though um and the the longer it survives the more it the more it you know finds product market fit and an avenue for growth the sure that foundation gets over time and that's what we saw with ethereum it's a fantastic example because you could be critical of ethereum for a variety of reasons but there was a short-term product market fit of being a platform for creating icos in 2017. that just wasn't near as firm of a foundation as what it started to develop with defy which gives it a firmer foundation today and as you um come off the momentum trade then that foundation is going to be stronger it's

going to rise up and it'll provide a better floor as long as they're right and then it's just a matter of uh whether it's the most profitable trade to be in or not but that's why it's the safer place to be as long as your your baseline narrative is correct if you did the same thing based on eos like you're not very happy this is why you're not you're not um this is why like so the ba the the base layer that fundamental layer the bottom portion i'm going to say it again let me use the p word the bottom portion of the pyramid again um like the bankless thesis is basically that if you're bullish crypto for this 10 20 year decades-long time horizon that base layer shouldn't be us dollars

that base layer should be what we call crypto monies right and the two emergent crypto monies are bitcoin and eth and we probably at bankless called eth a little bit earlier when people were like nah nah guys it's just one of those people i was one of those people okay so like a lot of people were like nah it's just bitcoin but we were like no it's it's bitcoin and eth maybe a little bit earlier but i you know we recently had um the three hours capital guys on and it was super interesting to hear them describe it because they seem to play at all three levels of the pyramid too sort of like yourself um but what they've recently switched over is like like on a bigger billions items

but like yourself right from a high level perspective ledger so like um and what they recently did is and this this astounded me is they changed the denomination of their their base layer it was bitcoin and they swapped that for eth now they didn't say whether that's a temporary kind of swap or whether that's going to be like a permanent swap and i think for them because traders it's like perhaps we'll see it depends we might come back to bitcoin it might be something else in the future who knows it might be neither of those things is that kind of how you see it it's like the base layer is sort of how you denominate your returns you could denominate your returns in us dollars eth bitcoin eos synthetics whatever you want but is that what the base layer is

basically the denomination yeah yeah the uh for instance i i made a tactical move to cash for like 48 hours right and that was because i felt like the market was heavy but my goal because i still think eth is going higher a good bit higher is more eth out of that bargain so if i don't accomplish the goal of getting more eth out of that bargain then i didn't do a very good job i felt going to dollars in a tactical sense was going to allow me to get more eath so i'm playing on my fundamental driving narrative the baseline of the pyramid is what's what i want and the tactical person in me said i think we're going

down uh that doesn't make me less bullish on eth in the long term sense it just makes me tactically think the best way to get more wreath is through that trade and yeah i do approach it that way i would not have denominated an eth if uh now i had to figure out this stuff listening to shows like yours i'm not trying to be this person but without 1559 like it doesn't play the same role to me as money like it plays a highly useful asset in a network um which from a utility perspective may still be greater than bitcoins even without eip 1559 but that provides the economic incentives to um want to hold eth rather than use it the scarcity game and i hate to be like

the gold versus oil person but prior to 1559 that's how i viewed these two assets i viewed bitcoin as digital gold and ethan's digital oil 1559 seems to be changing that narrative to where it becomes a store of value and i'm willing to make that bet that's the middle of the pyramid bet though right i'm long crypto the middle pyramid bet was hey this is defy summer hey this is bitcoin fall hey this is altcoin at pump everything in january um but i felt defy needed to be repriced more than anything now you can miss that shuffling i totally missed it because you know what i missed was in february i told myself like here's my exit event for the d5

repricing here's what i want it hit i didn't do it because i wanted a little more and it was like that's when you know the speculation really goes down the uh waterfall and you hit like the non d5 the bsc and solana stuff and all that moved i missed that rotation now that rotation was the top of the pyramid for me that was purely tactical based on greed and desire in the market for things that go up my fundamental thesis was still in defy and i held to that but it cost me because defy consolidated and went down while other stuff like did multiples so that's how these things kind of work together and to me

i just want to square my current trade on the fundamental thesis as you go down that that pyramid so that's why i said like i kind of disagreed i've always said like i want to screen by fundamentals and enter by technicals so the tactical trade is always what's going to cause me to enter and exit but the fortitude i have for the trade or like the time period or my ability to bag hold eath when it like technically doesn't look very good is going to be based on how i feel about that foundation so ledger at the very base layer the basal layer of this whole foundation what do you denominate in right so it sounds like eath is sort of close to the base layer but it's also still mid layer right you're waiting for

some calories like eip 1559. are you just trying to acquire more eats so that you can flip into bitcoin or ultimately is it all like us dollars well when the market was younger i knew how many ether how many bitcoin i had um as the market advanced i knew how i know much closer like how many dollars i have in crypto so i think my denomination has switched a little bit to dollars of late because i can't tell you like how many ether i have right now i can't even tell i don't know how many bitcoin i have you know what i mean like but i roughly know how many dollars i have so i guess at this moment i'm denominating in dollars now at d all through d5 summer and then like all

through the fall i could have told you exactly like what i had in eth what i had in bitcoin which one was the right one to be in and which one was the right one to denominate in but this cycle has been parabolic or was parabolic the parabola broke the uh that exponential growth it broke down and somewhere along that line i i guess i became a little bit of a dollar maximalist uh not on purpose and i haven't done a great job of it you know it's not like i'm sitting here at my all-time highs but like i want to be cognizant of what's my dollar basis um but that's still a rotation to me it's not the like 10-year the 10-year basis because i just think all this is still young ledger this is really great and uh the very next thing we want to do is get

into these charts for you to tell us that same story through the charts we're going to look at bitcoin us dollars we're going to look at each u.s dollars we're going to compare the last bull cycle to this one i'm going to ask you about the death cross i've heard about what it's like this bitcoin death cross thing is that real but guys before we do we need to thank the sponsors that made this episode possible and we will be back here with the charts in just a few minutes bankless is proud to be supported by unit swap uniswap is a new paradigm in asset exchange infrastructure instead of a cumbersome order book system where trades are matched with other humans uniswap is an autonomous piece of software on ethereum which is what ryan and i call a money robot no human

counterparties or centralized intermediaries just autonomous code on ethereum input the token you want to sell and receive the token you want to buy something brand new in the uni-swap ecosystem is the uniswap grants program is now accepting applications for grants we have been saying this for a while and we'll say it again dows have money and they are in need of labor if you think that you have something to contribute to the una swap dow apply for a grant to uniswap just look at the size of the uniswap treasury it's almost three billion dollars this mountain of capital is looking for labor do you have something of value to contribute to the uniswap dow no matter how big or small your idea is you can apply for a uni grant at unigrants.org and help steer

unit swap in the direction that you think it should go that's exactly what we did to get uniswap to be a sponsor for bankless and you can do the same for your project thank you uniswap for sponsoring bankless gemini is the world's most trusted cryptocurrency exchange i've been a customer of gemiini since i first got into crypto in 2017 and it's been my main exchange of choice to make my crypto buys and sells gemini is available in all 50 states and in over 50 countries worldwide and on gemini there are markets for over 30 various different crypto assets including many of the hot defy tokens and it's one of the few exchanges that has liquid die markets gemini just launched their earn program where you can earn up to 7.4 interest on 26 various crypto assets if

you're tired of paying fees and defy or you don't want to worry about defy exploits but you still want to earn interest on your crypto assets gemini earn is the product for you another product i'm stoked to get my hands on is the gemini crypto back credit card which gives you three percent cash back on all of your purchases but paid to you in your preferred crypto asset when i get my gemini credit card i'm going to make sure that i get my cash back in eth so whenever i buy something i get a little bit of eth bonus back to me at the same time you can open up a free account in under three minutes at gemini.com go bank list and if you trade more than a hundred dollars within the first 30 days after sign up you'll be gifted a free 15

bitcoin bonus check them out at gemiini.com go bankless all right guys we are back with ledger now we are going to open up some charts and ledger's going to school us on how to think like a trader here uh okay i i gotta start with this uh question ledger let's let's open up the bitcoin us dollar chart if we can because i've heard much talk about this thing in bitcoin that could be happening will be happening if bitcoin price doesn't go up in the next days to weeks called a death cross can you explain what that is if that's even relevant does it matter like it's been all over the place from uh you know traders i follow can you can you talk about that

and what is this chart telling us yeah so uh i want to start with basically i think it's a meme because it moves too slow uh most people when they talk about what a death cross is they're looking at a 50-day and a 200-day moving average i'm looking at simple moving averages here if you do exponential moving averages it weights the near dated candles sooner i like to keep things pretty simple when i do ta and the death cross is when the fast moving average this 50-day moving average crosses below the slow moving average or the 200-day moving average so if those cross they basically say it's game over go home it's done right um with certain crypto

well it's not with certainty in my opinion um now you can look at examples where yes that's true but if you look back here let's say you you did that and you didn't exit until it actually occurred um well bitcoin on that day was at like 7k and then it spent i don't know a year like hardly below that so did it really matter no because it didn't really have that much lower to go you didn't accomplish very much especially if you take this out of log and you look at where that occurred it was here okay so like you're going to tell me now we entered a bear market after we're we've gone from 20k to 7k that didn't accomplish a whole lot so i actually think

crypto markets move very quickly and a death cross meaning you're looking at one moving average relative to another is a meme and oftentimes by the time it occurs you're like way too late now there's multiple ways if you'll let me like indulge myself a little bit here there's multiple ways to use moving averages it is actually my favorite thing to use but the higher time frame bias and then the price relative to the higher time frame moving averages are what i prefer so let's stick with the slow moving average the 200 day and the 200 week are by far in my opinion the most important signs of health in the market

and in this case we did not actually find support by this green 200-day moving average now i've got this white one this is a 20-day moving average but what we did find is rejection from both the 200-day and the 20 which gives you some degree of bearish confirmation here so i'm much more opinionated about price relative to the moving average as a whole than i am two moving averages relative to one another one other way that you can look at it is price how far extended is it from a moving average now i'm going to show you the chart that is by far my favorite favorite macro analysis of uh of bitcoin over the years and the only reason i say

that is because it called three three macro bottoms which we don't get macro bottom three right yeah pretty much like ever since it existed if you go farther back it didn't you know that moving average didn't even exist so the 2015 bear market ground grant ground along the 200 week moving average and eventually pushed above it in legacy markets and crypto is no different than legacy it's just price on the chart uh in legacy markets this is the sign of really it being over or not uh that marked the bottom here and then notice here in december 2018 with a rarity test in february 2018 it was adult tap absolute bottom

and then uh in march this was the greatest you know i don't know what you call it like you know uh force major type event ever uh in in in markets and on a weekly basis it still secured that 200 week moving average which basically means this was all just forced liquidation cascade type stuff right um so i'm calling that a win for the 200 week as well so inevitably when we have another bear market whether it's a fast one or a slow one or whatever else you will be able to find me as a buyer at the 200 week moving average uh right now on bitcoin that is at the low low price of thirteen

thousand dollars because we can spend years away from it now with within a healthy bull market that's why you use and if you're doing a trend analysis strategy that's why i would use a faster moving average historically this 20-week moving average whether it's legacy assets or crypto is very handy and that's essentially what we rode in bitcoin throughout the bull market like every capitulatory bottom we did not break below it when we did the market was over and then look we used it as resistance when we flipped it the bottom was in now this was a choppy moment for it the faster the moving average the faster the trend strategy you're using the easier

it is to get faked out from it right now look up here this would tell us that we have some trouble on our hands right from a fundamental perspective on on bitcoin or a fundamental technical analysis it's not you know the fundamentals of technical analysis would tell you that we entered the danger zone below 45 46 k that is where it's telling you uh you need to be careful uh you need to consider risking off in that level of pyramids your rotation may be telling you uh on that middle part of the trade to uh consider dollars what um now what you do from here is a bit of a challenge right because

this is no man's land if you're just using these these two examples of moving average uh one other element if i go to ethereum if it will pull these moving averages up for me it's funny enough trying to calculate them there we go ethereum maintained that same exact moving average in crypto we have this thing where everything's quite correlated except for every now and then there's out performance or underperformance of one to the other so on that same basis it was telling you to do absolutely nothing yet because you're sitting right at support now me with my ethereum bullishness of late with that rotation trade i said okay well i guess i'll do nothing even though bitcoin was like screaming at me to get out um so that's why thus far

i've maintained my general bullishness on crypto markets um so that's that's kind of the baseline thesis there one other element here i was extremely bullish on ethereum in mid-2020 and if you looked at each btc uh it was getting obliterated back here but i got very bullish because this 200 week moving average is just appearing for the very first time on ethereum and uh historically when you move price above that is like your ask stanley druckenmiller or like these famous macro legacy people they are looking at this so if you talk about your institutional money they are

definitely looking at something like a 200 week moving average and the price going above it and then the price uh working off of the faster moving averages when it gets more dangerous is when it's like a hundred percent above the fast moving average so this is how you can tactically even if you think it's horoscopes you can tactically use it because ethereum in this case went 140 above the 20 week moving average which basically means relative to itself it is moving very quickly um so that's the type of thing that could have told you it might be a good time to start taking profit which you feel that in your gut sometimes as well because you're like oh wow i was euphoric about two thousand dollar eath and now it's four thousand dollar eat right

and then also i feel like this is a little bit of the coordination game where people are seeing ether move too quickly versus itself and it kind of turns into a game of chicken where all the people who are holding heath are looking at everyone who's also everyone else who's also holding anything like hey like are you selling like you better not be selling because i if you're selling i want to sell and some of these people held through some deep darkness that's right in winter 80 all the way down to 80 and so they're just like wondering should i sell like at 4 000 or like should i wait for 5k or something right um so that that's kind of a summary i guess of using trend analysis in in ta one other thing i'll show you and

there's a lot of power to this and it's i think it has a great deal of merit it's just purely horizontal levels the reason i say it has a lot of power is because when you're talking about moving averages you're trying to combine everyone's psychology there right because you're saying on average this is where people bought over time because that's what it is a pure horizontal is more where you have like this congestion of buying or or selling so 1950 2 000 eath is a good example of that where it just failed to get past it multiple times so then when it did it that's where we really found significant support even in the face of

sell-offs so here you have wick wick wick so after it had broken out and spent quite a long time under that level well then when it was topside and coming back down people were more confident in buying it and that's what really kicked off that parabolic move for ethereum and notice the confidence right that's right they're able to they feel comfortable buying with confidence and they go in for that move um and lo and behold even with the massive selling that we've seen recently that's where you finally found your buyers because that's where the wicks exist because the daily close was significantly above the lows of the day so this was more of your intraday

very top of the pyramid people uh trying to buy and capitulating or other reasons a variety of reasons uh people on leverage getting completely wiped and all these things can kind of go into your strategy but when you move down 40 percent 43 top to bottom in one day that puts a lot of carnage in the market but even in that scenario we found buyers eventually and then here we found more buyers as it retested kind of thrust it down into that zone and when i do ta it's complicated because none of this is easy you could say well i just bought the horizontal level because it went back to 2000. it just retested that level

you could say i sold because it went below the fast moving average you could say i bought because all open interest on derivatives in margin got completely wiped out even people who were pretty safe and they were only using say ave for their leverage you know like and they were borrowing 30 against their basis much less the 20x degenerates on uh you know centralized exchanges they all got wiped out right like everybody felt the squeeze if you are in have any exposure to markets and you have a 40 down day you feel the squeeze so in that type of scenario it's more than just like here's what the candles tell me it's also like okay everybody got wiped out who's left to sell like

they were forced to sell now all you have is the people like your beep you know your etherium at 80 type people except this time it's at 2 000 so that gives me some degree of confidence that as we kind of pulse down now as bad as it looks i actually think we've probably made the lows back here because like what happened in covid you just kicked anyone out like and if they didn't survive it they're just gone now and so i actually feel like we're doing okay that said if you want to continue the strategy you will use these levels to help inform you at the top of the pyramid to make those tactical moves and then use the the middle and bottom portions of that pyramid to reinforce

your uh broader decision making now if we do impulse lower you already know ryan who does not ta where do i want to buy ethereum if it's continues to go lower right can you make a guess i'm going to guess that uh 1767 mark right there for that 200 yeah this will move over time but i am going on a trend following strategy the health of the market is going to tell me that uh i should be a comfortable bull market buyer above that 200 day even if we've lost the faster moving averages for the trend following so people sometimes like to troll trend

following but if you look at legacy markets this stuff works on a historical basis very well what's the troll for trend following i gotta say like i've never seen um just a very concise extrapolation of of trend following but i really like it because it's so much like it's it's it's got this long-term view perspective so like what what's the bear case for trent following so people i respect uh even my co-host on up only uh crypto cobain they're like well of course it hits the moving averages because it's just an average of historical prices it's got to hit it eventually and that but my thing is that's also my point right like so we we both agree but he's like of course it hits it that doesn't necessarily mean i want to buy or sell

it based on that my thing is i just have plenty of historical evidence where it likes to bounce off some of these levels however you can totally and you can probably already feel this based on what we've talked about hit yourself with analysis paralysis looking at too many things so this is one strategy this is using two moving averages a 20 period moving average and a 200 period moving average primarily in a daily and a weekly time frame to make both tactical and long-term macro decisions this 200 week moving average for those long-term macro tactical with that 20-week or day that kind of stuff to me it's helpful if i follow a plan and i say look i'm

just going to risk off maybe it's only taking off my margin positions because remember we have this long-term fundamental thesis that we're bullish eth so maybe i take off my margin positions when it loses the fast moving average but i don't actually feel compelled to take off my long-term holdings unless i lose something much more fundamental like this 20 like this 200 day like say we go below it and then you know we're battling it from beneath that could be a signal that hey this market needs a lot more time to repair itself and i have to make those decisions later each trader every day has to determine how they're going to play this and that's why the further up that pyramid you're trying to play the more difficult

the decision making is because if you're just playing off the basis the bottom line one you just keep dollar cost averaging in as you have the ability to do so to the degree of which you are willing to have exposure to this market however somebody always loses because you know what there's a lot of volume up here a lot of people that are new entrants up here they are the ones feeling the heat today now ryan and david are not feeling the heat quite as much today because you guys were buying when eath was 300 and below as much as you could allegedly um so you don't feel the heat near as badly as someone who was like oh yeah ethereum is pretty cool but they're hearing about it for the first time when

it's three thousand dollars they are 10x more expensive per eth than someone buying at 300. so that's where that psychology comes in and this capitulation comes in as they just give up and move on and they're like oh no i've messed up again okay so but ledger it does seem to be the case that the lower you are in the pyramid with kind of even this this trend following the the the easier the decisions are the more the higher the higher conviction that you have yeah the higher conviction you have and like the the more obvious the decisions are right so like somebody who's more holder oriented like me more fundamentals oriented right might still be able to incorporate a little bit of this sort of

analysis to give them an edge toward the bottom of that pyramid without going full all the way up the pyramid full ta on it that's right uh they totally they totally can and the that's why if someone tells me hey you're on a deserted island you can only have one thing i'm gonna say give me a weekly chart of whatever i want and the 200 week moving averages on it you can always find that's what you want on deserted island they're like food or like shippers you know like i have no other information about what about what i'm trading uh there's plenty of things if i'm actually deserving what i i don't want to be trading uh but if i'm trading that's what i want and i can show you in chart after chart

now you have to be quite patient if you're doing nothing but playing a 200 week moving average you can see here i mean ethereum it didn't exist back here but it lived under it forever so it would have told you by ethereum relative to btc at 0.042 like when it finally got that break above it um now i may try to preempt such a move um but nevertheless that's what it told you to do and on that long-term decision making relative to each btc for example that was a pretty uh a pretty nice move and a pretty nice trade for you in fact you you doubled or yeah you'd you know if you let's say you

sold it right this moment you're up like 100 relative to btc now that's even if you denominated in btc now you have twice as many so that's how i'm approaching this from a technical perspective and it has absolutely nothing to do with my uh denominated in btc or denominate in eth you should be perfectly willing to trade eth if you think it's going to increase your your btc these these longer-term trends i think like um like speak to me i didn't um yeah i i guess uh this is kind of cool i'm actually considering you know adding this to my toolkit um there you go but one of the reasons brian why why i wanted to bring you on is to help ryan improve his charting skills because i'm on the way to how to work trading views

better at trading videos all right so like uh ledger let me ask you this right so maybe if we could just do a quick summary of what the long-term charts are telling people uh on the bitcoin us dollar chart and the um ethios dollar chart so it appears from everything you're saying that on bitcoin us dollars it's not looking great but like it's not looking like we're about to you it's it's not like early 2018 and the and the bull in the bull market's over but we're just in this like no man's land period of time right so we've got that as context right and then on the eth chart it looks to be the case that eth actually looks fairly strong

we've cleared out a lot of the leverage and the margin in the system we've sort of bounced back it's actually looking good so if this is the case if we get a bearish scenario for bitcoin for a while this this no man's land bitcoin is like the the largest asset by market cap you know like the the meme is that bitcoin leads and all the other coins sort of follow what does that mean what does that mean about i guess where we are in the cycle and how this is all going to play out summarize it for us yeah as much as you saw that relative strength on eth bitcoin still tends to have its way in terms of affecting all other markets when it goes up or down we're at an interesting inflection point

today i talked about the importance of those horizontals the most important of all horizontals whatever your prior high was well 20k that we broke through that was what enabled us to have that impulse in bitcoin first to 38k or 40k and then all the way to 60k what's terrifying now is this is really the only like daily horizontal level that we have and we're sitting right on it at the time of recording so what you have below this is basically this large air gap where you have to find out where are we going to have willing buyers if bitcoin loses this it can drag other markets it would also probably pull eth below some of those key markets like that 20

week moving average and this is how you have to play that balance to try to figure out where in the pyramid do i want to play my with my brain right now am i going to be tactical or am i going to be true to my like lower down the pyramid fundamentals or bitcoin is certainly showing significant weakness the only strength that you can really lend to a bitcoin thesis is that it's down 50 from its highs so if we are going to maintain a bull market a 50 drawdown is a buy not a sell if we're going into a bear market there have been times where we've gone down like 80 so if you've never sold any bitcoin are you going to want to sell it right here and take a tax event and all these other

things probably not but are you like looking at this tactically and thinking this is healthy no but yes on eth it is still looking this is the same chart same time frame same moving averages it's telling you don't do a thing until this goes below like 2200 or so on this on this weekly chart right and what you're saying is you're saying like the the btc us dollar price has given you the spooks and the each chart is is just do it is not doing anything but what you're cognizant of is that if bitcoin doesn't find support literally like right now uh yeah then then they can drag each with it yeah yeah the way to get the way to get eth

to like 17 1800 is by bitcoin essentially losing that gap that i just showed you and like bitcoin goes and pushes deeply into the 20ks that's what that's how you get e 1700 1800 like and really feeling like we you know should have risked off a little more than we did if bitcoin finds support and that's why these like time frames are important like a daily close is important if bitcoin can find support actually feel very good about eth also holding these higher lows like you know it's higher than it was the last time it made a low uh and continuing to consolidate the picture y'all used on the cover image of this video was basically a thesis that you know he's just going to go sideways and that's basically in this example of

bitcoin is struggling bitcoin has a pr battle right now going on like the energy stuff eth has a solution to that right like eth 2.0 is all about moving to proof of stake off of proof of work bitcoin has a battle that like globally between that and the criminal enterprise crap and all this stuff is it's its greatest challenge to its network effects since the be cash fork and the network effects rule all so this is putting my fundamental hat on for a second wait no closing this the middle of the pyramid isn't this the the narrative trading uh yeah it is it's from there yeah there's a narrative trade that sounds like that's right that's right because we believe that all that stuff is mostly baloney like

there's really good reasons for it there's renewable energy what you know you could talk nick carter but with me and my narrative and how i want to play this trade that's going to take time for bitcoin to repair itself on and eth has much cleaner answers to all of these things right now plus it has the potential bumpamentals or whatever of eip 1559 and monetary change and it plus it has the amount of transactions and desire to do activity on the chain and yada yada so in that rotation trade as long as bitcoin can repair itself i will maintain bullishness on eth but it may take some time basically as all these people who bought too high they're going

to be happy to sell you their coins when they break even so you have to go through what's called like a wall of worry on the on the way back up as those coins shift back to stronger hands etc a relief okay legends right all right so one thing david and i have been comparing this to you and it's hard not to is uh 2017 right and like in particular uh june july summer 2017 when eath hit like 420 and then it dropped all the way down to the hundreds and then it was sort of flat for a while in the meanwhile bitcoin i sort of remember this just kind of sat there it's mostly flat um do you think that this is like 2017 in any way or is 2021 its own thing and like

are you like guys stop comparing this to previous cycles yo the data doesn't fit what's your take uh that is my like dream scenario because this is like everyone in the world of crypto if you're gonna say hey draw me an ascending triangle they'll say okay we'll go look at 2017 east now it got obliterated relative to bitcoin here because bitcoin did run some during the summer um but on the dollar basis i've never had better conviction in a trade than buying eth like 300 to 350 anticipating its breakout now i didn't hold it all the way to 1400 i wasn't crazy uh these things tend to go further than you anticipate but this was kind of a

classic higher lows equal highs you know you just bang into the ceiling of that thing enough times eventually it breaks and from a technical perspective that's our dream scenario today that essentially we're framing such a triangle and then we go and we spend potentially all the way until the fall without a new high but you know we kind of tap into it a couple times and then we get kind of our end of year seasonal run pushing the highs and that's where you get your 7 8 10 k eath type of move everyone is euphoric and ryan gets to retweet uh eth at 3k is hilarious i've got that scheduled

yeah all right so ledger uh tell me this riddle me this uh it seems like uh what you just said is that we are possibly setting up for that same exact ascending triangle if enough people also watch that does it become true that is where ta starts in the first place you know the 200-day moving average i think forever ago it was like the market's roughly open 200 days a year so therefore 200-day moving average is the annual average price of an asset well we're open 365 so why don't we use the 365-day moving average the answer is because everybody looks at the 200.

[Laughter] so this is the same thing if people see something over and over and they all agree they reach consensus that it's the most logical next outcome then these things can become self-fulfilling prophecies uh so yes you can call them horoscopes but it's also this is what people look at they look at what are the previous highs what are the what you know what's the resistance of where people are going to be happy to take profit or to risk off because they don't know if it can make a new high that's why it becomes a repeating high and as it comes down they're like okay well now i've lowered my price that's how it becomes higher lows so history does not always perfectly

repeat itself but it can rhyme on these charts and you can see it play out so yes uh my my hopes my dreams my eath bull thesis is all in this uh so would i love to see this yes that's the dream will it happen screenshot this david will it will it happen um i hope so but it'll probably look a little different than than we all anticipate so first of all ledger markets are weird man they're weird like this is very strange but psychology is weird i'm trying to visualize psychology so that is quite a challenge okay so we we

talked about the happy case the happy scenario and the happy scenarios we're in 2017 just mid 2017-ish what's not so happy scenario that you see the not so happy scenario and i'm going to stick to ethereum sorry breaking the rules about bullish content only i'm curious i need to know this i'm going to stick i'm going to stick to eth here because with bitcoin i think we know what it's going to look like it's going to look like uh the regulatory hammer coming down it's going to look like the energy debate uh really going in favor of the people that don't like proof of work it's you know those things more elon tweets more elon tweets like just get out of here buddy uh you can't stay away once you get in

you're done you've been the second richest person in the world four four eth in my mind we are all assuming 1559 massively decreases the supply like by 90 the triple halving type of effect well what if the move to layer two actually makes it so that fees are just so much lower that we're not burning near as much as we otherwise anticipated what if we can't get consumer apps built on ethereum so that like the the native surge of transactions and activity on the ethereum network does not go up what if there's smart contract risk that we don't anticipate or what if the

yields go to zero so that it's not worth yield farming or participating in d5 like we anticipate we will see those things happen on a chart if they happen our 10k eath is our pipe dream and we'll see something like this 20 week moving average fail and we'll see a grind out and we'll have to find out can we hold prior highs like the 13 1400 type of level that we had back in 2018 now to some people they're like that's fine do it i'm still bullish on ethan the long term you know we're just getting a fraction of all people on there but that's not good in the near term because right now the near term narrative is trying to price in 1559 and supply shock and defy adoption etc if we don't see those things then it could

that could give us a lasting bear market and in my mind the next like big bear market i do think it probably bottoms like seventy to eighty percent down not ninety ninety five percent like it did last time so there's a non-zero chance a decent number of those questions uh brian that you just brought up like what happens if eip1559 gets killed by l2s what happens in a bear market to defy yields i just want to because you brought those things up i do want to chill our current state of defy panel coming tomorrow where a lot of those questions we are going to ask uh the the guests there uh so quick show yeah quickshield and you gotta save the time of that if you're gonna show it uh what time of that is at 1 p.m pacific

time 4 p.m eastern time uh we got santiago santos spencer noon and vance spencer on the show two spencers and santiago it's gonna be awesome um all right so what happens if good things happen for ethereum the ledger like eip1559 does do well layer 2 works out um the merge feels like it's on time all of those things are going well but and yet bitcoin is having trouble like so bad disaster scenario for bitcoin but all things ethereum is up to his promises yes in that scenario some sort of mix when like then it'll be the funniest twitter environment ever

is really challenged like that will be a lot of fun i'll i'll uh i'll be there for the entertainment but like the cope on the bitcoin side and the clout on the east side like it'll almost be too much to bear uh but of course i'll still want to be there to witness it but yeah i think we would go for the highs on each btc but it doesn't necessarily mean eth goes the full way like 8 10 k means bitcoin has recovered um you know the scenario of of the flipping but bitcoins like in the 20ks the flipping can still occur with ether like four or 5k or something like that uh i think like kobe loves destruction um so like to witness it so i think

that's uh both his least favorite from a like actual you know gaining wealth perspective but also favorite from a pure entertainment perspective is to see the flipping happen with bitcoin like in a bear market oh my god so that that is one potential outcome but it would mute the upside on eth it sounds like it would mute the upside from a dollar basis on eth but like per bitcoin eth would be quite strong and um i i don't know where i fall on this to be quite honest forever i was like .055 is a magnet to me like it was just where we kind of broke down in the bear market before and i was just like on a pure

horizontal magnet what it ended up being was we thrust right through it and then turned it into support if you look on the right hand side of this chart where that weekly came and thrusted down that's where people found themselves willing to buy and it was a key horizontal level my target was more like .085 we almost got there but not quite do we hit these other what were then bearish you know lower highs do we get all the way back to all-time highs 0.15 for the entertainment value i hope we do uh because like the the drumming the drumming of the flipping will be so loud that it'll be very entertaining um i don't think we'll spend a ton of time flipping if we do

do do so if we do kryptos in some bad dire straits like bitcoin might have lost the uh the narrative and it might take a much longer bear market for crypto to kind of re-identify itself like those network effects have to redistribute and again this is more of a fundamental hat but like that means something is like people are really going after bitcoin from a regulatory perspective or something um unless outsiders are looking at our industry saying what is crypto if bitcoin isn't bitcoin that's right that's right and i think it could put cell pressure on everything so it's like yeah eth flipping everything but like everything's in a bear market so that would be

kind of painful but i guess that's possible i don't think it's the most likely i think the most likely is bitcoin does start to repair itself uh eth does fairly well um but then the flipping like when you are like having a celebratory podcast about the flipping occurring it's also the top [Laughter] that makes a ton of sense because we all know that euphoria and gloating is where the top gets marked um ryan unless you have any more questions about ether and bitcoin or eth versus bitcoin i want to pull up dpi verse eth because this is something that we look at on the bankless show oh my god that bottom is holding by a string buy a hair uh ledger i don't know

if you listen let you know at the bottom you call this yeah i i don't call bottoms because i don't chart like ledger charts but i called the dpi bottom right around point one three uh and i mean it's looking looking kind of good but we are right there we are on the block man it's at the p it's at the point of best risk reward i just inverted it because i want you to look at this by flip like you're flipping your own bias here and saying am i bullish this chart my answer is i'm super bullish this chart uh like just to set this up for for people who are kind of like me though this is like a mark of d d5's performance token performance d5 token performance right relative to eth is

what we're looking at here and you just said you're super bullish defy i said i am bullish d5 but this chart of being bullish the inverse version i'm actually bullish eth relative because he flipped it so flipping at your heart is a nice way to check yourself right so like oh are you bullish this chart or are you bullish all the time and we need to flip this chart oh yeah you're just bullish no matter what god this is all psychology that's right and that's why i said that in the first place now could it hold here aka in that inverted version be rejected yes however think of where we are in the cycle like and where you want to be what i want to be is liquid and i am less liquid if i'm like spread out amongst my

favorite d5 protocols than if i'm basically saying look i'll get the upside of eth but if i need to go to dollars i can do it in one trade because you can get a lot of uh a lot of coins sold in one trade when it's eth usd right and to me that's why i think the under performance of d5 relative to eth will occur until the chart repairs itself as the chart repairs itself let's say that ascending triangle repeat of 2017 when that's in like the the last 40 of that type of consolidation i bet d5 will be freaking exploding right but until each repairs itself this may be bottom but it's not like i

think it's going to go like straight back up to the relative highs and this is irrelevant this is no different than eath btc it's just down the trade and it's it's the reflexivity increases i'm sure you've had guests talk about reflexivity so yes this could hold but i've minimized my defy exposure because i just want to make sure i can get in and out of eath and eath will be representative of my d5 bullishness and none of these d5 protocols currently have as good of tokenomics as eip1559 in my mind even though some of them do have promises of token value accrual etc i'll get eighty percent of the upside just holding eth and that makes me a

little scared to hold on to this and it could either range sideways or go to new lows neither of which are works there is worth the risk to me and my gut take on this is that if bitcoin continues to break down as we saw and even does manage to hold on and stay pretty good as from a from a dollar perspective if btc breaks down d5 tokens might also break down right just because like at some point bitcoin controls the markets and even though d5 tokens are generally more correlated to ethan btc at some point btc breaking down makes everything else break down and then if d5 tokens break down right here versus eth below 0.13 there might just be too much bearishness

in the whole entire market for anyone to be happy at all and like how much can how much can eth really control the market it's never really done that before honestly what i think you hope for is something like this where it sweeps the lows and then it goes so like just repeat that here so you sweep the lows and then you go because what you do all these all these markets they just move wealth from more hands to fewer right like eventually souza is just going to own all the coins in the world [Laughter] yeah so if we sweep those lows that's when you know us 100 iq middle curve people are like oh crap it lost it i'm out and they're like laughing enrich and just say like okay now we buy it and we pump

it and that that would be the one the one thing i'd look for however that doesn't necessarily mean you enter right there you're you don't have to be the person collecting that liquidity you don't need quite that liquidity you can buy it here okay so like you can buy when it clears this level because when it clears that level it's probably going to be a confirmation of broader trend reversal and you might play it from .15 to maybe the range highs to 0.28 and just like we talked about with each btc well guess what you just made 80 more east so this ryan is my case for like why the charts assist your broader narrative because if you're going to actively trade whatsoever um then this is going to assist you in

doing so it's just going to assist you in trying to make logical decisions this is a point at which i want to remind holders that suzu cannot take your coins if you just never sell them you just hold on to them that's true and you're not on leverage because if you're on leverage you will have to sell sometimes so the other thing uh ledger i'm curious about in this chart is like so if we start to see defy continue to break down can you put on your your lower pyramid fundamentals hat again like what do you look for in d5 tokens to buy from a fundamentals perspective are you like because what's interesting about this is forever in crypto we were just like trading things that have no um

cash flow value like not really capital assets what like what is the fair market value of bitcoin in eth it's like what's the fair market value of gold is really difficult to answer but some of these crypto assets they have cash flows and so if you look at something like yfi its price to earnings for ratio in may was like 12. like incredibly low relative to its growth what do you what would you look for in uh gem gem style like maybe blue chip or maybe not d5 tokens if you if you feel like d5 starting to bottom relative to eth yeah thank goodness we're not having to rely on things like fat protocol thesis thesis yeah

because i much prefer if you can just look at numbers and say well i think this is a relative value because from an income you know perspective like this is not even priced like a growth stock in equities and yet look at the growth potential in this ecosystem so i think those are extremely valuable tools to be able to see like what is the token value accrual that goes back to holders who are participating in the network and that is far better than governance alone what we see though and this concerns me a little bit is like some networks are pricing it as if they already feed that token value back to holders but they don't so no offense to unit swap fantastic product it doesn't do that yet but it's

priced as if it's going to and similar to buying like a super high tech growth stock with no profit it's the same thing in d5 whereas you look at say sushi maybe it's a better relative value because they already feed those profits back to token holders and same with wi-fi so what i wouldn't am going to look for to say i truly have a value in these assets is to say do they feed token value to token holders today uh like the fees and stuff back to token holders do they do that today is that a relative value in itself and is the usage of this protocol defensible um or is it just infinitely forkable and people chase yield etc if it says yes to

all of those then it's going on my list of things i want to buy when i'm bullish d5 yeah that's a really good case like what one other bearish point i've heard about these cash flows themselves ledger and i'm like curious you know because we're both like in our early 20s you and i remember a little bit of the dot-com stuff right yeah so like i'm the one was interesting pretty sure yeah i'm pretty sure you're 57. [Laughter] what's interesting about some of the uh.com stocks is like um companies like yahoo back in the day late 90s were like crushing it in terms of revenue and growth right but when you looked at their revenue it was like advertising revenue coming from what other.com stocks right like so the inflated valuations of the other.com

stocks were essentially fueling yahoo's revenue so even people who are like quote unquote fundamentals investors and looking at cash flows of a stock like yahoo well that was being juiced by the bubble of other dot-coms that was kind of surrounding it and in a bear scenario again we're like we don't talk bear stuff do we david but like sometimes we we need to uh like some of some of that revenue could just disappear from an asset like wi-fi because why because well the staking yield disappears what are your thoughts on that case is that a potential um yes i think what happens when the market goes down when it becomes a bear market is something you have got to consider

because if you're banking your your valuation off of something earning 20 25 yield if it goes down to 5 percent yield is it still valuable and the answer is basically no uh not near as valuable especially when i think you have to have a few points of yield in crypto just to account for the fact that there's smart contract risk even in these platforms that have existed for a couple of years we don't know the potential exploits are out there there's always bugs in software so it's a it's a potential problem it could extrapolate the downward spiral of the market similar to ico treasury selling that occurred in the bear market last time it's like all they have is eth they have to

survive now they have to sell their eth as it goes down and they capitulate you know like we could see similar reflexivity i guess and something to consider in case of a strong bear market but i think the bigger and more important thing is that the liquidity flows will go to to projects that are fundamentally more sound and right now the liquidity is really spread out amongst a lot of projects that are just priced up in a very highly speculative manner and so i would hope to see value and and and total uh market value accrue more to the true blue chips the people that are really building quality stuff that'll last a long time so ledger this has been i think one of the most informative uh state of the

nations that i've i can remember in recent memory and you've actually started something called flip metrics which i think if people are interested in more stuff like this they might be interested in so tell us all about flip metrics and what that is yeah so i uh i'm officially deep in the rabbit hole of defy because i i've gone uh full time so honestly podcasting content creation's my side hustle and flip metrics is a business that i've co-founded with two partners and we're a team of six right now with um some investors and we're we're building what we hope to be actionable intelligence for people that are involved in d5 so if you think about on-chain

events that could impact the future value of a token for instance who's buying and who's selling like what are you seeing in whale wallets or different scores or things like that what we have right now is just a simple tool and it's basically saying who's fomoing stuff like are they running out of a token because they want eth and you know you can sort by slippage or price this is just a simple and fun little uh tool to to take a look at and these update based on blocks as they come in but we'll have so much more that will be focusing both on token fundamental analysis itself and then also on uh wallets and to be able to do

significant analysis uh based on on-chain metrics and my primary thesis is that more trading will occur on chain than on centralized exchanges over time and that the flows similar to the technical analysis that we talked about just price on charts this adds a whole other level of analytics that you can do because you're analyzing chain network activity we don't have like 10k reports you know from the sec and stuff uh to analyze these assets so this is like our on-chain version of being able to do that and we hope that it provides insights for people so it's a completely free product and you can go to flippmetrics.com and sign up well i think both ryan and i are extremely bullish on on-chain data because that's where we like to see our

trading activity because on-train data is bankless data uh and so uh big fan big fan and i hope you all the best sir thank you we have a ton of work to do it's just a little landing page right now um but we're very excited i love that ledger has been officially defy pilled he is all in at this point on d5 it's awesome man um hey look you kind of changed my mind around like um like trading analysis in this in this short uh time we've had together so like thank you it's been a really cool episode and um a learning episode for me personally i want to ask me this last question it's like absorbing all of these things the big question still in people's minds is hey is this 2017 and is this a brief pause

or are we about to enter a much like a longer uh bear market and i know we've gone through like the the different hypotheticals but like let's make it binary um what's your probability here ledger and everything you've seen first probability that this is a pause and we resumed the bull run and then second and probability that uh like we're going down for for a dip for a period of many months and sort of bull run is cancelled for now uh i think the most likely outcome is that we don't actually make new highs this year um but that's not the same as a bear market um

so like almost no man's land somewhere we haven't that's not 2017 but it's not doesn't quite fit other markets either so something new yeah uh and other people have helped influence me on this thesis but you know you mentioned the com era it's not like because amazon went down 90 one time it was gonna it went down 90 another time like it proved itself in the market it emerged as a technology and and for showing like online commerce is real today cryptocurrency is real you know like there's nothing people can't say it's not they cannot like it they can try to regulate it but it is real and i think that we're seeing more of an

adoption cycle this time rather than a speculative cycle and i think what will make it painful to people is that it won't be like 2017 because it won't be so rapid 2017 was just one parabolic curve up and then it was done and we will see that again that's in my mind like what you see in like a dogecoin type of move or some of those things but i think we're going to see a true adoption curve occur in blue chip crypto assets and those of us with a long-term bull thesis will win but it's going to require patience and people expecting to like 100x every year in one asset or the other are going to be sorely disappointed you know i've always uh had reservations uh in because 2017 was

my first cycle right and i had like the extreme amount of wealth at the top of 2017 at an astonishing number of nine eth right uh and i was really really excited about uh this this bear market and then the bull market because of all the promises of like oh a new cycle is coming new cycle is coming but i was always extremely skeptical as like well if too many people are all saying that we're just going to do another 2017 thing i i always thought that if too many people are saying it then it can't become true because people will try and trade that reality too soon and all of a sudden like we can be bullish on crypto and have number go up uh but like a

complete repeat of everything we've already seen in the past seems like opium to me yeah i simultaneously am trying to say there will be logic in the market and i'm also seeing you know i said well you said doge will not go to 10 cents well it went to 60. gme and amc are fundamentally worthless and they're short squeezing funds to bankruptcy we are seeing logic in the market that is i mean just devastating to normal human beings that do reasonable analysis uh so i i can think that it doesn't mean it won't happen but i don't think it's the primary outcome and if legacy bombs that could send us into like a much longer

cycle of repair but we will emerge from that because i do believe this technology is here to stay one person i'll highlight i just distinctly remember how peter brant of all people said how 2017 was so abnormal as a trading event just asset that asset class that exploded that he would have been absolutely shocked if it ever occurred again as this bull market began out of the coveted recovery he was like if this does this again it's like a double whammy on something that's typically a generational trading event like if you're just the trader right so to to think it's going to go just as fast and it has gone fast so far so it

could slow down for a long time and still be like really really positive impact for a long-term investor but the fact that we've moved so fast again i think that's why it demands more time for repair consolidation before like further move up so that's why i think i think this cycle is going to be significantly slower um and without the like negative 95 type of thing and i think if we want this industry to mature and these charts to mature like we need to be um ready for boringness uh we need we need for boringness to enter the markets because like ryan and i on bankless making content has been it's exhausting right now

i was about to say the most fun of my life but [Laughter] i'm glad to know that you're exhausted well you're like okay we've been on for an hour or two have we moved like 10 while we've yeah yeah but like yeah yeah this this is all great i mean i think the the bottom line for bankless listeners is like be prepared you're saying we could still have an explosive growth up we are in a late stage fiat credit cycle who knows who knows absolutely what could happen at the same time this the middle scenario that that you mentioned where we have this kind of this leveling off period in this steady period and slower growth that's definitely very appealing

to me because you tend to attract the right sort of people yeah you're attracting the baseline of the pyramid people you're attracting the middle part of the pyramid people when you're wearing that tactical hat that very top part of the pyramid those are the people that are here today and gone tomorrow like you don't want them in the long term it's a top heavy market and that's when you can lose the bid when it goes away and it's like you know like there it goes and it's and they're like you're pulling the coins back down to the people with a greater fundamental thesis now as a time if you're bullish on crypto is probably when you should be dca but instead our friends that got in eth for example above 3k they're freaking out so they have the exact opposite mental attitude that they

should have at this moment yep absolutely uh ledger this has been invaluable i think a lot of lessons here for bankless listeners the biggest lesson of all is the story of crypto is continue on the journey keep a long-term orientation to this market we've got industries to disrupt we've got years to go ledger thanks so much for joining us on the state of the nation thanks for having me we'll have you back soon all right guys risks and disclaimers of course trading is risky ethan's risky so is bitcoin so is defy you could lose what you put in but we are headed west this is the frontier it's not for everyone but we're glad you're with us on the bankless journey thanks a lot

hey we hope you enjoyed the video if you did head over to bankless hq right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence we recommend joining our daily newsletter podcast and community as a bankless premium subscriber to get the most out of your bank list experience you'll get access to our market analysis our alpha leaks and exclusive content and even the bankless token for airdrops raffles and unlocks if you're interested in crypto the bankless community is where you want to be click the link in the description to become a bankless premium subscriber today also don't forget to subscribe to the channel for in-depth interviews with industry leaders ask me any things and

weekly rollups where we summarize the week in crypto and other fantastic content thanks everyone for watching and being on the journey as we build out