📺 SotN #49: The State of the Charts | Ledger Status

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

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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