Layer2Sandwich

Sentiment check is hell of an indicator, see my last #Bitcoin $BTC analysis on Tradingview . Clearly exaggerated reactions all over the field have always been among one of the best indicators of potential tops or buttoms, whether short or long term. And that will never change.

@AriDavidPaul Have a look into the Wim Hof Method (daily breathing exercises, cold exposure, mental training). Very effective in many ways. Maybe it could benefit you as well. I’m sure it will, at least in some way. Wishing you all the best!

Sharing my mental and physical health journey and learnings on neurodivergence. My guess is this applies to many of you. 15 months ago I exited BlockTower and was beyond burnt out. I was anxious, depressed, and felt like I had the body and mind of a 70 year old. I spent the next year on the “basics.” Sleep, exercise, nutrition, minimizing screen time, connecting with close friends and family. That helped a lot, but I still struggled with a couple bad habits and felt far from being capable of tackling anything ambitious. The neurodivergence angle - a few years ago, I got assessed for autism and ADHD but definitively and clearly had neither (at least according to current tests, literature, and psychiatrists.) In the last month I connected with a couple new doctors including a brilliant neuroscientist that opened my eyes to various patterns. Almost all the literature and studies on these topics come from “average people.” High functioning people are largely absent from the literature because we don’t volunteer for medical studies and often “cope” so well that we go undiagnosed. I’m fairly certain now that I have some form of ADHD (and am somewhere lightly on the autism spectrum), very different from anything I’ve ever read about. My own pattern - hopping from rabbit hole to rabbit hole, a constantly working mind that’s only silenced by intense flow state like rock climbing, procrastination as my biggest (and almost sole) source of anxiety, and gravitating towards nicotine and THC with no desire for any other substances. Apparently this is an archetype for high functioning ADHD, and reflects a weak dorsolateral pre-frontal cortex that controls “executive function” in the brain. Buddhist style meditation and any type of arduous deep focus strengthens this part of the brain. Doom scrolling and staring at financial charts all day weakens it. I’m exploring a range of remediations - technological, nutritional, psychological, and already seeing benefits. Closer to the start of this journey than the end. Will share more soon with things that worked for me.

My last update for $Bitcoin has played out almost perfectly. We reached the long-awaited $60,000 region with strong downside overextension and fearful market sentiment - exactly the kind of setup that often leads to a short-term relief bounce. That said, I still don’t expect this to be the final bear market bottom for #BTCUSD . Bitcoin – Weekly Outlook: The higher-timeframe trend remains bearish. The $58k–$60k zone is acting as a key support area, reinforced by the Weekly MA200 (green). A short-term bounce or consolidation is likely, but a confirmed trend reversal is not in place yet. Manage your risk accordingly. As long as we don’t see a clear structural break on the weekly chart, the base case remains lower prices ahead - meaning the macro bottom is still not in (imo). Key Levels: • Trend: Bearish • Short-term Support: $58k–$60k (major support + Weekly MA200) • Short-term Resistance: $72k–$75k. A sustained break would confirm a relief rally • Mid-term Support: $45k–$49k. Next major macro support zone • Mid-term Resistance: $94k–$98k. Reclaiming this area would be an early signal of a potential trend reversal. Further confirmations, especially sustained price acceptance and structural strength, would be required to validate a true macro reversal. Weekly Summary: Bitcoin is still in a broader downtrend but is currently reacting at a strong support zone. Short-term upside moves are possible while $58k–$60k holds. A clear break above $72k–$75k would improve the short-term outlook, while only a move above $94k–$98k would confirm a true trend reversal. Bitcoin Daily Outlook / Positioning: Since I’m primarily expecting a relief bounce, I’ve closed my short positions and started buying slightly above $60k into the overextension. I’ll add further positions only on confirmation. Either a reclaim of $72k or a sweep below the recent low followed by a short-term trend reversal on lower timeframes to capture momentum. #Bitcoin #BTC #CryptoTrading

Not a fan of being the bearer of bad news, but: $Zcash corrected the first downside impulse exactly into the golden Fibonacci level, completed a bear flag, and has now broken below it. This is a clean short setup which points to a continuation of the bearish trend. Next major support: $260.

$Bitcoin Monthly Chart Perspective: After being quite vocal about a potential cycle top, or at least a distribution phase above $100k, the signals are starting to align. This smells like a cycle top to me. After such a strong sell-off, sharp relief rallies can occur at any support level. Still, I’d be cautious with too much short-term optimism. Historically, Bitcoin tends to form major bottoms around the 200 WMA. Despite the “this time is different” narrative, the higher-timeframe structure looks quite familiar. From that perspective, the ~$60k area stands out as a potential macro support zone. This scenario assumes the cycle top is already behind us, which remains my primary thesis. #Bitcoin #BTC #Crypto

@mert x.com/Layer2Sandwich…

- largest privacy pool in crypto - similar tokenomics to BTC - new talent into core - 100x scaling upgrade by summer (also will make quantum defensible) - Winklevoss DAT buying 4% of supply - lower than BCH when macro stops nuking, best risk/reward will be ZEC encrypted gold

Ugly monthly close for $Bitcoin. On the weekly chart, Bitcoin has only shown a bearish retest of the 93,000 USD level so far. I expected a stronger bounce to the upside after that sharp sell-off into the 80,000 USD zone to be honest. A move back toward the resistance area between 96,000 and 100,000 USD would have been plausible and could have sparked another wave of broad optimism before the next correction. Whether we get that or not, we’ll see. The trend is still pointing downward. Key support zones remain around 70,000 USD and 60,000 USD, with the latter aligning with the weekly SMA200 in the coming weeks. The move toward the 60,000 USD area should still take some time. Remember: Markets punish impatience and reward discipline. #Bitcoin #Crypto

To all the committed $Zcash holders who’ve been saying over the past weeks that it doesn’t matter whether you buy during the hype phase because “fundamentals will make Zcash go up anyway”. What’s your view on the monthly close? I see the fundamentals, but that’s only one part of an investment. The other, and often even more important aspect, is timing. With open eyes and without emotions, it was pretty clear that Zcash would come under pressure together with Bitcoin. But emotions made many overlook this obvious point. For everyone who bought near the end of the hype phase, I genuinely hope that zodling long-term will pay off, but personally I wouldn’t bet on it. The monthly close is one thing above all: ugly. We’ll see where Zcash finds its support alongside Bitcoin. That level will determine whether Zcash truly has a future, or at least a place in a positive future in crypto, or whether this was just another late-cycle pump like in previous bull markets. #Zcash

In Defense of Exponentials I used to tell founders, the reaction you are going to get to your launch is not hate, it’s indifference. By default, nobody cares about your new chain. I have to stop telling them that now. Monad just launched this week, and I’ve never seen so much hate about a blockchain that just launched. I’ve been investing into crypto professionally for 7+ years now. Before 2023, almost every chain I’ve ever seen that launched was mostly met with enthusiasm or indifference. But now, new chains are born into a chorus of hate. The amount of haters I’ve seen for projects like Monad, Tempo, MegaETH—before they even hit mainnet—is a genuinely new phenomenon. I’ve been trying to diagnose: why is this happening now, and what does it mean about the psychology of this market? The Cure is Worse than the Disease Forewarning: this is going to be the vaguest blockchain valuation post you ever read. I don’t have any fancy metrics or charts to sell you on. Instead, I’ll be arguing against the zeitgeist of Crypto Twitter, which for the last couple of years, I’ve been constantly on the opposite side of. In 2024, I felt like what I was arguing against was financial nihilism. Financial nihilism is the belief that none of these assets matter, it’s all memes at the end of the day, and everything we’ve built is inherently worthless. Thankfully, that’s no longer the vibe. We have broken out of that spell. But the zeitgeist now is what I’d call financial cynicism: OK, maybe some of this stuff has value, maybe it’s not all memes, but it’s grossly overvalued and it’s only a matter of time before Wall Street finds that out. Not that all chains are worthless. But these things are all maybe worth 1/5th-1/10th of what they’re currently trading at (have you seen these PE ratios?), and so you’d better pray like hell Wall Street doesn’t call us on our bluff, because once they do it’s all getting wiped out. You’ve got many bullish analysts now trying to conjure up optimistic L1 valuation models, inflating PE ratios, gross margins, DCFs, trying to fight against this mood. Late last year, Solana very proudly embraced REV as a metric that could finally justify their valuation. They proudly announced: we—and only we—are no longer bluffing to Wall Street! And, of course, almost immediately after REV was embraced, it fell off a cliff (though $SOL, tellingly, did better than REV did). Not that there’s anything wrong with REV. REV is a very clever metric. But the point of this post is not metric selection. Then came the launch of Hyperliquid. A DEX that had real revenue and buybacks and PE multiples. And the chorus said—look, look I told you! Finally, for the first time ever, a token that has some real profits and a proper PE multiple. (Nevermind BNB, we don’t talk about that.) Hyperliquid will eat everything because obviously Ethereum and Solana don’t make any real money, we can stop pretending to value them now. Hyperliquid, Pump, Sky, these buyback-heavy tokens are all great. But the market always had the ability to invest into exchanges. You could always buy Coinbase, or BNB, or whatever. We own $HYPE, and I agree that it’s a fantastic product. But that’s not why people were investing in ETH and SOL. The fact that L1s don't have exchange-like profit margins is not why people were buying them—if they wanted that, they could’ve bought Coinbase stock. So if I’m not critiquing blockchain financial metrics, maybe you think this post is going to be chiding the sinfulness of the token-industrial complex. Obviously, everyone has lost money on tokens in the last year, VCs included. Alts are down bad this year. And so the other half of the zeitgeist on CT is arguing about who's to blame. Who’s become greedy? Are the VCs greedy? Is Wintermute greedy? Is Binance greedy? Are the farmers greedy? Are the founders greedy? The answer, of course, is the same as it’s ever been. Everyone is greedy. Everyone. The VCs, Wintermute, the farmers, Binance, the KOLs, they're all greedy, and you are greedy too. But it doesn't matter. Because no functioning market has ever required anyone to act against their self-interest. If we're right about crypto, we can all be greedy and the investments will still work out. Trying to analyze a market that has gone down by figuring out “who’s greedy” is going to be about as fruitful as commissioning witch trials. I guarantee you, nobody just started being greedy in 2025. So this, too, is not what I’m going to be writing about. Many people want me to write a post about why $MON should be valued at X or $MEGA at Y. I’m not interested in writing this post, or advocating that you buy anything in particular. In fact, you probably shouldn’t buy any of them if you don’t already believe in them. Will any new challenger chain win? Who knows. But if it has a material chance of winning, it's going to be priced on that basis. If Ethereum is worth $300B or Solana is worth $80B, a project that has a 1-5% chance of becoming the next Ethereum or Solana will be priced according to those probabilities. Somehow CT is scandalized by this, but it’s no different than Biotech. A drug that has less than a 10% chance of curing Alzheimer's is priced by the market as worth billions of dollars, even if 90% chance it won’t pass stage 3 trials and will go to 0. That's how the math works—and turns out, markets are pretty good at doing math. Binary outcomes are priced on probabilities, not on run rates or moral turpitude. It’s the “shut up and calculate” school of valuation. I really don’t think that’s an interesting question to write about. “5% chance to win? No way, that’s clearly a 10% chance!” Markets, not articles, are the best way to assess that for any individual token. So here’s what I am going to write about: CT doesn't seem to believe anymore that chains are valuable. I don’t think this is because they don’t believe new chains can win market share. We just saw Solana dominate market share after emerging from the ashes less than 2 years ago. It’s not easy, but of course it’s possible. It’s more that people have come to believe that even if a new chain wins, there’s no prize worth winning. If $ETH is just a meme, if it’ll never generate real revenue, then even if you win, you won’t be worth $300B. The contest is not worth winning, because these valuations are all bunk and it’ll all come crashing down before you go to claim your prize. Being optimistic about chain valuations has become passé. Not that nobody is optimistic—obviously there must be optimists out there. For every seller there’s a buyer, and as much as CT cool kids love to drag L1s, people are comfortable buying SOL at $140, ETH at $3000. But there’s a perception now that all the smartest people are over buying smart contract chains. Smart people know the jig is up. If not now, then soon. The only people buying here are suckers—Uber drivers, Tom Lee, and KOLs who say stuff like “trillions.” And maybe the US Treasury. But not the smart money. This is bullshit. I don’t believe it, and you shouldn’t either. So I felt like I had to write a smart person’s manifesto on why general purpose chains are valuable. This post is not about Monad or MegaETH. It’s really in defense of ETH and SOL. Because if you believe ETH and SOL are valuable, the rest is straight downstream. Defending ETH and SOL valuations is generally not my job as a VC, but fuck it, if nobody else is willing to do it, then I’ll write it. Feeling the Exponential My partner Bo experienced the Chinese Internet boom first-hand as a VC. I’ve heard how “crypto is like the Internet” so many times now that it doesn’t even register for me anymore. But when I hear his stories, it always reminds me how costly it is to be wrong about these things. A story he often tells is about when all the early e-commerce VCs (it was a small group back then) got together for coffee in the early 2000s. They debated: how big is the market for e-commerce going to be? Is it going to be mostly electronics (maybe only techies will use PCs)? Could it ever work for women (perhaps they’re too tactile)? What about food (maybe impossible to manage perishables)? These were deeply important questions for early VCs to decide what to invest in and what prices to pay. The answer, of course, was that literally every single one of them was devastatingly wrong. E-commerce would sell everything, and the target audience was the whole fucking world. But nobody at the time actually believed it. And even if they did, it would be too absurd to say out loud. You just had to wait long enough for the exponential to show you. Even among the believers, very few thought e-commerce would become as big as it became. And those few who did, almost all of them became billionaires from just not selling. Every other VC—as Bo tells me, since he was one of them—sold too early. It has become passé in crypto to believe in the exponential. I believe in the crypto exponential. Because I’ve lived it. When I started in crypto, nobody used this stuff. It was tiny and broken and awful. TVL on-chain was in the millions. We invested into the first generation of DeFi, MakerDAO, Compound, 1inch, back when they were science projects. I remember playing around on EtherDelta back when DEXes traded single digit millions a day, and that was considered to be a huge success. It was complete dogshit. Now we routinely trade in the tens of billions on-chain every day. I remember believing it was crazy that Tether hit a billion dollars in issuance and was being written up in the NYT as a ponzi scheme on the brink of shutdown. Now stablecoins are over $300B and regulated by the Federal Reserve. I believe in the exponential because I’ve lived it. I’ve seen it over and over again. But you might respond—well, stablecoin growth might be exponential, maybe DeFi volumes are exponential, but they don’t accrue to ETH or SOL. The value doesn’t get captured by the chains. To which I answer: you still don’t believe in the exponential. Because the exponential’s answer is always the same: it doesn’t matter. This stuff is going to be so much bigger than it is today. And when it’s absolutely enormous, you’ll make it up on scale. Study this chart. This is Amazon’s P&L from 1995 to 2019. That’s 24 years. Red is revenue, gray is profit. You see that little blip on the end where the gray line goes up? That’s when, 22 years in, Amazon started actually making a profit. Amazon was 22 years old when this little gray line of net income first peeled off of 0. Every single year before then, there were op eds and critics and short sellers claiming that Amazon was a ponzi scheme that would never make any money. Ethereum just turned 10 years old. This is what the first 10 years of Amazon stock looked like: 10 years of chop. All along the way, Amazon was beset with doubters and non-believers. Is e-commerce a VC-subsidized charity? They’re selling underpriced cheap low-quality knick-knacks to bargain hunters, who cares? How are they ever going to make actual money, like Walmart or GE? If you were arguing about Amazon’s P/E ratio, you were in the wrong regime. That’s the regime of linear growth. But e-commerce was not a linear trend, and so every single person for 22 years arguing about P/E ratios was devastatingly wrong. No matter what you paid, no matter when you bought, you were not bullish enough. Because that’s what exponentials do. When it comes to truly exponential technologies, no matter how big you think it’s going to get, it just keeps getting even bigger. This is the thing that Silicon Valley has always understood better than Wall Street. Silicon Valley was raised on exponentials, while Wall Street was raised on linearity. And over the last few years, crypto’s center of gravity has migrated from Silicon Valley to Wall Street. You can feel it. Granted, crypto growth doesn’t look as smooth as e-commerce’s growth. It’s burstier, it goes in fits and starts. This is because crypto, being about money, is deeply tied to macro forces, and it also has more violent regulatory push and pull than e-commerce. Crypto strikes at the heart of the state—money—and so it’s more unnerving to governments than e-commerce ever was. But the exponential is no less inevitable. It's a crude argument. But if crypto is exponential, then the crude argument is correct. Zoom out. Financial assets want to be free. They want to be open. They want to be interconnected. Crypto turns financial assets into file formats, makes it as easy to send a dollar or a stock as to send a PDF. Crypto makes it possible for everything to talk to everything. It makes it all 24/7, global, interconnected, and open. That will win. Open always wins. If there’s no other lesson I've learned from the Internet, it’s that. Incumbents will fight against it, governments will huff and puff, but eventually they will give up against the adoption, the generativeness, the sheer efficiency that this technology enables. It’s what the Internet did to every other industry. Blockchains are how that same trend will gobble up all of finance and money. Yes—with enough time—all of it. An old saying goes: people overestimate what can happen in two years, but they underestimate what can happen in ten. If you believe in the exponential, if you zoom out enough, then it’s all still cheap. And it should humble you that every day, the holders outlast the sellers and naysayers. Big capital has a longer time horizon than CT swing traders might lead you to believe. Big capital has been trained through history not to fade big technologies. You know, the big gushy story that originally got you to buy $ETH or $SOL? Big capital believes that story and hasn't stopped. So what exactly am I arguing? I am arguing that applying P/E ratios to smart contract chains (the “revenue meta,” as it’s now called), is giving up on the exponential. It means you have consigned this industry to the regime of linear growth. It means you believe 30 million DAUs on-chain and <1% of M2 is it. Crypto is just one of the things in the world. A sideshow. It did not win. It was not inevitable. More than anything, I’m arguing to be a believer. Not just a believer, but a long-term believer. I’m arguing that this exponential will be bigger than anything else you’ve been a part of in your life. That this is your e-commerce. That you will look back when you’re old and tell your kids—I was there when it all happened. Not everyone believed it was possible, that whole societies could change, that all of money and finance would be transformed by programs running on decentralized computers that we collectively owned. But it actually happened. It changed the world. And you were a part of it. Disclosure: These are my own views. Dragonfly is an investor in $MON, $MEGA, $ETH, $SOL, $HYPE, $SKY among many other tokens. Dragonfly believes in the exponential. This is not investment advice, but is advice of another kind.

@sircryptotips I'd say: Heidi was right 😝 x.com/Layer2Sandwich…

Off to bed. Enjoy the fireworks and know that Bitcoin will be just fine and central banks are printing more currency than any time in history. Ignore the noise and consider dollar cost averaging on the way down.

🚨 Bitcoin is showing clear signs of distribution - and most people are still ignoring it. Many of those big accounts stayed overly bullish, refusing to respect the signals. That’s dangerous. In markets like this, hope and greed are the reasons you give back all your profits. People keep saying “everyone is bearish” - but that’s simply not true. At the top, everyone was euphoric. After the drop, it was “leverage flushed, time to go up again.” Then came the “everyone’s bearish = bullish” narrative. Truth is: the majority remains bullish, still hoping for higher prices. I’m not saying that’s impossible - but you should be aware that proper risk management is absolutely crucial here. I even had Grok analyze Crypto Twitter two weeks ago to see if I was right with most accounts still being bullish. Result: 80–85% of accounts overly bullish. That’s not capitulation. That’s classic top behavior - delusional bulls refusing to see the signs. And when the downtrend becomes “obvious”, they’ll accelerate it. In speculative markets, reaction time is everything - especially for Altcoins. No matter what big accounts preach, I currently see zero bullish signals. Of course, that can change quickly, but until then the current downtrend remains in play. Hopium will always exist, but it doesn’t belong in a serious strategy. 👉 Manage your risk accordingly. And if you haven’t yet, read my last thread about why I believe we’re in a Bitcoin distribution phase - and how to act accordingly. #Bitcoin #BTC #Crypto

🧵 $Bitcoin – Signs of a Top Distribution? Volume drives markets. I believe it’s highly probable that the Bitcoin cycle top is either already in — or very close. Personally, I lean toward the first. But of course, nothing is ever certain in this market. My general approach in times like these: don’t be all in, don’t be all out. Stay partially allocated, hold cash, and wait for confirmation in one direction. Risk management becomes the key factor when market direction is uncertain. Now, let’s talk about price action and trading volume — and why I believe Bitcoin is currently in the distribution phase of this cycle. 📊 First Chart – OBV and Divergences The On-Balance Volume (OBV) indicator helps identify whether price action is truly supported by volume. It’s not always perfect, but when read correctly, its hit rate is impressive. In 2021, weekly OBV divergences revealed most false breakouts early — clear signs of unjustified price extensions. The same happened at the bottom in November 2023: strongly rising OBV while price was still dropping → confirmed the bottom. Notice the orange circle: After the second top in late 2021, we saw a strong sell-off, then a short consolidation between the 25 EMA and key support around $45,000, before the next leg down. 📈 Second Chart – Today’s Price Action In the current weekly chart, we see higher prices in October compared to August — but lower trading volume. That’s not a healthy sign. Now: OBV already broke down while price still holds up — and historically, OBV often leads price moves. Looking at the daily Bitcoin chart, the same pattern emerges. Right now, Bitcoin is rallying on declining relative volume Not ideal for sustainable trends. OBV already broke down. In 2021, OBV broke down before price confirmed the move — a clear early warning (see orange circle). Now let’s also take a look at the Strategy (MSTR) weekly chart: MSTR Weekly (MicroStrategy) MSTR’s weekly chart shows signs of exhaustion. When leading proxies like MSTR start showing weakness while Bitcoin still holds up, that’s another red flag for me. Also, look at the similar chart patterns at the last top and now. 🚨 So, what now? This isn’t about calling exact tops — it’s about reading the signs and managing risk. No one has a crystal ball, but there are indications that consistently offer valuable insights. Right now, most of those signals suggest caution to me. Even if the rally continues, the question is: How are you positioned if the trend fails? Increased uncertainty = increased need for discipline. Thanks for reading. Stay alert, stay rational, and manage your risk. #Bitcoin #BTC #Crypto #Trading #PriceAction #VolumeAnalysis

@Tradermayne I agree. The right management is key, most just go “all in” or “sell everything.” Right now, signals show clear caution. More uncertainty means more discipline. x.com/Layer2Sandwich…

Lots of comments on my post about comparisons to 2021 top, bear divs etc. Listen there are plenty of reasons based on the chart alone to be EXTREMELY bearish. We have a monthly and weekly SFP, and a weekly structure break. We are threatening to close back within the 2024 yearly range. A bunch of similarities indeed. I completely see a case for bearishness, I think it's a reasonable position to be looking to sell any rally for lower prices. That is the beauty of the markets and trading, 2 ppl can have drastically different views. The key is having a plan and knowing where your idea is wrong, then you simply wait and let the market decide.

@sjdedic Hopium won’t save portfolios. The signs are clear, yet instead of talking risk management, many keep feeding delusion. The market can turn bullish again, of course - but why build your strategy purely on hope? x.com/Layer2Sandwich…

gm to absolutely everyone except all the whiners and quitters on my timeline. Cycle’s not over, job’s not done.

Stole this from @VentureCoinist. This is on the money.

2 rules of liquidations: 1) Always buy the end of the liquidation 2) Always sell the end of the dead cat bounce as low wicks tend to be revisited over coming days/weeks