Value & Momentum

Summary

• The speakers see more downside before the buy zone. Value & Momentum’s read: the market “hit the limit of how long the market can go up or stay stable without Bitcoin going up,” buyers are tapped — NASDAQ up 40bps, gold up 1.5%, and BTC still down almost 3% — so he wants a flush toward 100K before re-engaging, noting 95K is “a little tough to hit” because buyers step in just above 100. Jonah’s symmetry math lands in the same place: April’s tariff puke was 30% peak-to-trough, this liquidation-driven move with “no catalyst” deserves at most two-thirds of that, “probably more like half” — 15% is ~105K, 20% is ~$99,000. Sign-off: “See you at 105K.”
• Solana’s run from 230 to 248 was “entirely predicated by 3 million coins of Solana coming online” — when moves are entirely driven by open interest, you have to start getting worried. The 250–260 short Avi flagged worked; total OI peaked at $33B four days ago and has rinsed $2–3B since. The DAT diagnosis: it’s 2021’s chain-incentive rotation again — “recycled money from old DATs,” not new capital — and alt outperformance without Bitcoin historically lasts 2–3 weeks (SOL got ~6), so the clock ran out.
• The Aster disagreement is the episode’s best signal. Avi wants the round-two trade — nibble ~$1 after the 35% pullback, sell at $2, because assets that rip while “nobody gets in” generate FOMO on dips. Jonah calls it “a nuclear cesspit” and another Trumpcoin: $2.4B FDV on no statistically significant revenue, “you’re buying a chart,” and Trump buyers lost 60–90%. Both flag the wash-trading math: Aster shows 1/20th of Hyperliquid’s BTC open interest but half its volume — “that ratio makes no sense… it’s potential fraud.” Jonah: “I bet we won’t be talking about Aster in six months.”
• Follow the tradfi catnip, not crypto-native froth. Galaxy used to trade down 6% on a 1% BTC dip; today BTC fell 2.5% and Galaxy lost 43bps — proof fresh dollars are backstopping crypto equities, not tokens. Stablecoins are in “a renaissance” (Maple’s syrup USD pool filled ~$200M in about 30 seconds), and Avi expects Plasma to “do extremely well” post-launch as tradfi piles in. Both expect a crypto-equities season; Avi’s scar tissue — selling post-FTX miners and GBTC for a 2x before they 10x’d — is the cautionary tale.
• The DAT-implosion playbook is live. Nakamoto (the David Bailey DAT) is the “first implosion,” trading ~35% below NAV at $1.33 versus a $1.12 insider price (still locked up) — close enough to insiders’ cost that it could be due for a short squeeze or bounce. The trade: buy DATs run by competent teams that won’t miss coupon payments and be forced sellers, at a discount, and ride back to par. BitMine (Tom Lee) hasn’t cracked yet but “it’s sort of inevitable” — and it’ll be the better buy because it’s actually run well.
• Crime season is the meta, and it’s tradeable. Value & Momentum bought a lot more Tesla the morning after the lip-read “I miss you” moment between Trump and Elon; the Intel 10% stake taught him that when the US government touches a stock, “they’re going to make sure this thing goes up.” Plays: BNB (Binance is the prime beneficiary if perps go legal in the US), XRP — “Ripple in and of itself is a totally useless company that just sells XRP,” but the business improves in crime season’s later innings — and a soft Bitcoin floor because Trump “has staked his reputation” on crypto.
• Tactics into the flush: don’t fade the first move after 10 days of sideways, and 117 — once a symmetrical no-man’s-land equidistant from 124 and 107 — is now a clean stopout that makes selling rallies the better trade until value buyers appear “at least at 100K.” Jonah won’t stay short more than a few days (this is a liquidation, not FTX/Luna-style structural repricing) and is lying in wait for an April-like scoop of Hyperliquid and Pump — “these two just amazing money machines.”

Deep dive

1. The divergence played out — buyers are tapped until Bitcoin resets

• Avi opens by cashing his check from last week: the crypto-down/equities-up divergence he flagged “seems to be playing out.” BTC couldn’t crack 117, ETH put in a lower high, and today NASDAQ is up 40bps, gold up 1.5%, and Bitcoin is down almost 3% — “that’s a sign that we’re sort of tapped out on buyers.” His conclusion: “we’ve lost momentum, we’re in chop mode,” and the move now is waiting for “a nice flush” — maybe 100K, though 95K is “a little tough to hit” because buyers step in just above 100.
• Value & Momentum’s structural read: “we hit the limit of how long the market can go up or stay stable without Bitcoin going up… you need Bitcoin to be at a good value level where people are comfortable buying it — and we’re not necessarily there yet.”
• Positioning advice, exactly as hedged: if fully allocated, cut a little; if you got out last week, stay out; if you must, nibble on the most nuked names you like (Aerodrome, and BNB “because it’s been so strong”).

2. Jonah’s sober counter: this is a range full of momentum traders, not a top

• Jonah refuses the panic: every test of local highs attracts leverage betting on a break, “when it doesn’t, people get liquidated like today… and then it cleans the slate for yet another rally.” Funding got toppy, total open interest peaked at $33B four days ago and has shed $2–3B — “there’s not much more to analyze than this is a market of momentum traders and it’s ranging so everybody’s just getting chopped up.”
• Why capital won’t exit crypto: the S&P’s Sharpe ratio is “probably above two” this year and above three since the April lows — “it feels like it goes up three out of every four days. With that in the background, how could you possibly be upset about having money in Bitcoin?”
• Still, he thinks “altcoins are about to get shellacked pretty hard” — which is the opportunity: build the shopping list (HYPE, Aerodrome, ENA for the bulls) before “we continue roofing.” His sentiment test: “would I buy alts here? How does that feel in my gut? Right now I wouldn’t want to catch the falling knife.”
• Victory lap noted: the uranium pitch from last week — URA up 14% in a week, “full-on boom boom town shitcoin,” no profits taken.

3. Solana’s move was open interest, and DATs are 2021’s recycled-money game

• The SOL trade autopsy (long from 200 targeting 240–260, short at 250–260): the push from 230 to 248 was “entirely predicated by 3 million coins of Solana coming online” — and “when moves are entirely driven by open interest, you have to start getting a little bit worried.”
• The DAT framework, as told: in 2021 each new chain launched an incentive program and capital rotated chain one → chain two → chain three. “The money coming into the Solana DAT is not necessarily new money. It’s recycled money from old DATs” — people who made money in the first rolling into the next. “Obviously that’s not the most sustainable thing in the world.”
• The historical rule: alt outperformance while Bitcoin stalls lasts “two to three weeks, maybe three to four weeks max.” Solana got about six — longer than usual, but the limit is the limit.

4. Aster: Avi trades the FOMO, Jonah smells fraud

• Avi’s case for round two: it ripped so fast that “a lot of people ended up on the sidelines,” which “makes it a good trading asset” — after a 35% pullback he’d “nibble around a dollar and try to sell out at two.” He’s clear-eyed on the endgame: CZ-backed perp dexes get “a moment in the sun and then it sort of just dies” — the trade is the initial run-up, the sell-off, and the secondary run-up for everyone who missed.
• Jonah’s refusal, in full: he missed Hyperliquid and Aster for the same reason — “I still don’t have a good mental framework for understanding why the world needs another exchange… call me a boomer.” At a $2.4B FDV with no statistically significant revenue sample, “you’re buying it on vibes… you’re buying a chart” — “this is just another example of Trumpcoin,” whose volatility buyers lost 60–90%. “I bet we won’t be talking about Aster in six months.”
• Then both converge on the numbers: Aster’s homepage claims $258M of open interest against $532B of total trading volume; on Bitcoin specifically it runs $236M of OI to $2.2B of daily volume versus Hyperliquid’s $3.8B OI to $4.8B volume — “literally a 20th of the open interest but half of the volume. That doesn’t make any sense… it’s potential fraud.” (Plus the indignity: the site advertises high leverage next to “perpetual” — “they’re trying to one-up us… they should have put 999x on there just to be respectful.”)
• Jonah’s meta-lesson: “what’s underrated in this market is the ability to just maintain your patience… this is the ultimate shiny object that distracts you out of good long-term positions.”

5. Follow the tradfi catnip: stablecoins and crypto equities are where fresh dollars live

• Jonah calls a stablecoin renaissance — Stable, Plasma, and Maple, whose syrup USD pool filled “in like 30 seconds,” roughly $200M. Avi says Plasma is “absolute catnip for tradfi investors… I think it’s going to do extremely well” once it launches beyond Hyperliquid, because tradfi will “pile into this thing.”
• Jonah’s concrete example of the same signal: Galaxy used to be “Mike Novogratz’s Bitcoin IPOed in Canada” — down 6% when BTC fell 1%. Today BTC is down 2.5% and Galaxy is down 43 basis points. “The market’s telling you everything you need to know about where the fresh dollars are coming from” — new traders backstopping crypto equities while XRP, HYPE, and ETH fall 4–6%.
• Avi’s confession that seals the thesis: post-FTX he put substantial capital into miners and GBTC and “sold it all for like a 2x, and all of these miners have 10x’d since then… many such cases.” Both expect crypto equities to do “very well over the coming months.”

6. The DAT implosion trade they planned months ago has arrived

• Nakamoto — “the David Bailey DAT” — has “absolutely collapsed,” which Value & Momentum blames on mismanagement, shares flooding the market, and inability to raise. It now trades at a ~35% discount to NAV, at $1.33 versus a still-locked-up insider price of $1.12 (sourced “from somebody that did the deal”) — close enough to insider cost that it could be due for “a nice little short squeeze or bounce.”
• The framework, per Jonah: “pick the DATs that aren’t going to be missing coupon payments and forced to sell crypto when they trade to a discount, buy them, and hope they have the staying power to ride it back to par” — real equity analysis of teams and financials.
• Value & Momentum’s sequel call: BitMine (Tom Lee) hasn’t collapsed like Nakamoto, but “it’s sort of inevitable that it will at some point — and that’ll be an even better buy because it’s actually run well.” The satisfaction is audible: “I love it when we plan out a trade months in advance and then it starts to give you opportunities to get in.”

7. Crime season is the trading meta — and it puts a floor under Bitcoin

• Jonah raises the Luna question: if fishy projects keep smelling fishier, does crime season reprice all of crypto like May 2022? Value & Momentum: not “unless something truly horrendous happens,” like a full exit scam — “I just don’t see it as an existential risk until we get a Democratic administration.”
• But crime season itself is a strategy: “if the US government is involved with a stock, they’re going to make sure this thing goes up” — the Intel 10% stake being the template. Value & Momentum bought a lot more Tesla the morning of the lip-read Trump–Musk “I miss you” clip: “clearly Trump and Elon are back on good terms… probably going to be good for the stock” over six months.
• The crime-season book: BNB (“if perps become legal in the US, Binance is going to be the primary beneficiary”), Hyperliquid to a lesser extent (KYC may block the catalyst), XRP — “Ripple in and of itself is a totally useless company that just sells XRP,” but the business improves “as crime season progresses into the later innings” — and Galaxy. And a floor under BTC itself: Trump “has staked his reputation in some way on crypto,” so “there is some floor level on Bitcoin where crime will take place and Bitcoin will go up again.”

8. The map down: don’t fade the first move, and meet at 105K

• Avi’s tactics: after 10 days of sideways and a 3% break, “you tend to not want to fade those substantial moves.” And the range logic has flipped — 117 used to be symmetrical, “pretty equidistant” between the 124 highs and 107 lows, so there was “no easy stopout.” Now 117 is a clean stopout above, making it “a much better trade to sell here.” Momentum traders will exit on the lower high, and “I don’t think the value buyers come in until at least 100K.”
• Jonah’s symmetry-through-time: April’s Liberation Day puke was 30% peak-to-trough with a real catalyst; this liquidation with “no catalyst” deserves “max two-thirds of that, but probably more like half” — 15% is ~105K, 20% maximum is $99,000, where “we’re going to be having the same conversation we had in April: close your eyes, don’t be a coward, and buy.”
• He caps shorts at a few days — “it does feel like a liquidation trade, not a structural repricing” like the Elizabeth Warren era, FTX, or Luna — and keeps dry powder for an April-like scoop of Hyperliquid and possibly Pump, “these two just amazing money machines. It’s fine not to be early as long as you lie in wait.” Parting handshake: “So I’ll see you at 105K.” “See you at 105K.”