Crypto Market Wizards is RabbitX’s series of interviews with sophisticated DeFi traders and investors. We discuss their background, strategies, psychology, risk management, and other interesting topics that helped cultivate their process and success. We do this because it’s interesting, and we want to help everyone learn to be better traders. Part of what makes DeFi great is we’re all learning in public together, every day. This is our way of contributing to the community. This interview is with Sistine Research: a prominent DeFi trader and streamer, with a huge following on Youtube and well-known on Twitter for his unique and sophisticated trading breakdowns (you should go follow him immediately).

He’s a RabbitX trader too! Which we’re particularly honored by, as it’s exactly these kind of thoughtful, professional traders we hope to attract. Enjoy!

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RabbitX: Tell us how you first got interested in trading?

Sistine: I started trading in 2016 and 2017 when altcoins started taking off and it became clear there was a lot of opportunity in this space. I’ve been deep in crypto ever since.

RabbitX: How’d you get into crypto?

Sistine: My brother told me about Bitcoin in 2012-13. We were just high schoolers at the time and didn’t buy any unfortunately. Ended up buying small amounts of BTC and ETH on sketchy exchanges in 2015-16 (Cryptsy and BTC-e ring any bells?). Unfortunately, a lot of this crypto was lost when they went under. Oh, and I started mining ETH out of my apartment bedroom in 2016 with about ~24 GPUs.

RabbitX: This is first-rate lore.

RabbitX: If you had to pitch your edge or unique capabilities, how would you describe it? Don’t be humble.

Sistine: I’m fairly good at identifying the inputs and incentives that drive markets rather than depending strictly on price action or fundamentals. I only trade using indicators I designed myself which are centered around identifying price levels where incentives shift in the market with regards to risk/reward and leverage trading. When it comes to investing I’m not afraid to take large positions in projects that I have conviction in.

RabbitX: You only use your own indicators? Can you elaborate, any examples you can share?

Sistine: So basically I isolate for leveraged trading incentives in the market. Margin pressure levels are what I mainly trade based off of. For example on DOGE here. If we assume leveraged longs want to keep their liquidation points below that wick low (local low)...

Then as soon as price goes above the 2x long level (0.106), all the longs that want to maintain a position below the local low can no longer do so on 2x leverage. So there is a big drop in demand around that level, because it becomes riskier to use > 2x leverage. Same logic but in reverse for shorts.

RabbitX: Really interesting stuff. Love the novel thinking! Tell us about your first big win. Did it make you ‘post economic’? Life changing or just a huge gain?

Sistine: First big win was buying ETH at $12. Made me about $50k when I was still in college, so at the time it was a huge win relative to my near-zero net worth. As mentioned, I lost a lot of that when BTC-e and Cryptsy went under, but it definitely hooked me.

RabbitX: If you weren’t doing this what else would you be doing?

Sistine: Probably running some sort of eCommerce or online advertising business. Some type of entrepreneurship where the overhead is low and upside is relatively uncapped.

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RabbitX: Do you have any hobbies or interests besides trading/investing? Anything risk-seeking?

Sistine: No, I’m pretty risk averse outside of investing/trading. I like to golf, wrestling (wrestled through college), family, dogs. You know, the wholesome stuff.

RabbitX: Do you love what you do, or are you just good at it?

Sistine: A mix of both. It’s quite rewarding to have big wins, especially when you have to sit through grueling and psychologically painful losses at times.

RabbitX: How would you describe your trading strategy?

Sistine: I look for asymmetric risk/reward opportunities in the market. Things where the upside is significantly higher than the downside. Things the market is unaware of yet or is just over-looking.

RabbitX: Would you call yourself an investor (someone who expects intrinsic value/use of an asset to go up) a trader/speculator (someone who tries to predict price movements over short time frames) or a farmer (airdrops, yield farming, etc).

Sistine: All of the above. I actively do all three. I believe that engaging in all of these helps diversify some risk, but ultimately I only do any of them if I think the risk/reward is asymmetric to the upside.

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RabbitX: Do you have preferences for crypto you trade? Eg low liquidity, certain alts, majors, etc. If alts, why not just trade majors on leverage?

Sistine: For trading, I like majors on leverage. For investing, low caps (now that we are in a bullish market). RabbitX: My man.

RabbitX: Do you stick to what you know, or do you find yourself changing what you trade and how you trade it?

Sistine: Both. The crypto market changes rapidly. You have to stay on top of new developments or you’ll be stuck bag-holding dead projects, hoping for a bailout.

RabbitX: Facts. Can you elaborate on your research process for identifying new opportunities.

Sistine: I use Twitter to gauge general trends and sentiment. From there, use critical thinking to predict where attention, and subsequently capital may flow as a result. For example, I was very bullish on Solana from <$20 for a few reasons, one of which was the amount of mind-share and attention it still got on Twitter at the depths of the bear market. It was one of the only chains that was regularly talked about. Once it pumped to $50 - $60, it became a reasonable bet that money and attention would start flowing to the application layer, so I began researching projects on Solana that overlapped with current narratives (mainly AI). This led me to get into Nosana and Synesis. One at really low valuations.

RabbitX: Logical and clever. How do you determine your entry and exit points?

Sistine: For investments, I almost always try to take my initial investment out after a 2x, unless I am just extremely bullish. For exits I just use market comps. For example, entered Nosana at a $30M FDV. Now it’s trading at almost $400M.My initial investment has been taken out, but Render Network and Akash Network, two similar use cases, are trading at FDV > $1B, leading me to believe there is additional upside.

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RabbitX: How do you decide when to adjust or exit a position that deviates from your original plans?

Sistine: If something has changed about the thesis making it a less attractive investment, then I’ll just cut it and move on. Never marry your bags.

RabbitX: Smart man. When do you double down on a losing trade?

Sistine: Rarely ever.

RabbitX: When do you add to winners vs taking profits?

Sistine: When something changes to make it even more bullish. For example, when funds and whales started entering TRUMP, I added more because it was a bullish confirmation.

RabbitX: Do you approach taking profits losses with a thesis that’s confirmed/denied, or simply a price point? Sistine: Both.

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RabbitX: Does macro play a role in your process?

Sistine: Yes, it helps identify the trajectory of the market (bull market vs bear market)

RabbitX: Do you have a different approach to trading and investing in bull markets vs bear markets?

Sistine: Yes. in a bull market I exclusively long. I never short in a bull market unless I am farming funding rate. Also, I invest in low caps in a bull market. Both of these things are suicidal in a strong bear market.

RabbitX: What trade or event taught you the most?

Sistine: I bought DeGods and DUST in the wake of the FTX collapse. They were the most active NFT community at the time on Solana. I doubled down when they announced their move to Ethereum, because despite Solana doing well now, it was a very bullish move at the time. Then I sold all of it before the price crashed when they flopped on Season 3 months down the road. Perfect example of never marrying your bags. You have to be willing to dump it all and walk away if it turns from a bullish investment to a bearish one.

RabbitX: Thanks so much for your time and for talking with The Bunny. Your trading streams and analysis are excellent and we very much look forward to seeing your star rise!

Sistine: Thanks, I love the RabbitX platform and use it for a lot of my perps trading. Looking forward to seeing you guys keep winning.