Hypotheses

Madjik's data feeds are based on fundamental hypotheses about market dynamics. On this page we explain all our hypotheses. Many of the hypotheses are un-orthodox, unexpected, or may even feel strange, but they are all based on years of operating in crypto, stablecoin/EMT, fiat, stock/share, derivatives, etc markets. On the Strategy page, we also share some (but not all 😉) of our own trading strategies for your inspiration.
FALSE ASSUMPTION: 🚫 "Order book depth shows real liquidity" → ✅ FACT/Hypothesis: Order books are fake - spoofing and phantom liquidity dominate
Hypotheses

FALSE ASSUMPTION: 🚫 "Order book depth shows real liquidity" → ✅ FACT/Hypothesis: Order books are fake - spoofing and phantom liquidity dominate

Hypothesis HY10056 FALSE ASSUMPTION: 🚫 "Order book depth shows real liquidity" → ✅ FACT/Hypothesis: Order books are fake - spoofing and phantom liquidity dominate That order book showing $10M of support? It's mostly fake. Spoofed orders, algorithmic bids that cancel, and phantom liquidity create an illusion. Real executable
2 min read
OUR HYPOTHESIS ✅ = Sharp falls trigger cascading liquidations - 10% corrections become 40% crashes
Hypotheses

OUR HYPOTHESIS ✅ = Sharp falls trigger cascading liquidations - 10% corrections become 40% crashes

Hypothesis HY10055 OUR HYPOTHESIS ✅ = Sharp falls trigger cascading liquidations - 10% corrections become 40% crashes In traditional markets, 10% corrections are absorbed and recovered. In crypto, a 10% drop triggers leveraged liquidations that cause another 10% drop, triggering more liquidations. Corrections become crashes through mechanical feedback loops. Trading hypothesis What
2 min read
BE AWARE ⚠️: Only a handful of exchanges control derivatives - concentrated power means coordinated manipulation
Hypotheses

BE AWARE ⚠️: Only a handful of exchanges control derivatives - concentrated power means coordinated manipulation

Hypothesis HY10051 BE AWARE ⚠️: Only a handful of exchanges control derivatives - concentrated power means coordinated manipulation Only 3-5 exchanges control 90%+ of crypto derivatives volume. This extreme concentration means a small group can manipulate prices, trigger liquidations, and profit from customer positions. Decentralized assets trade on centralized, manipulable venues.
2 min read
FALSE ASSUMPTION: 🚫 "100x leverage maximizes my gains" → ✅ FACT/Hypothesis: 100x leverage guarantees your liquidation - it's an exchange profit machine
Hypotheses

FALSE ASSUMPTION: 🚫 "100x leverage maximizes my gains" → ✅ FACT/Hypothesis: 100x leverage guarantees your liquidation - it's an exchange profit machine

Hypothesis HY10050 FALSE ASSUMPTION: 🚫 "100x leverage maximizes my gains" → ✅ FACT/Hypothesis: 100x leverage guarantees your liquidation - it's an exchange profit machine Exchanges offer 100x leverage not because it benefits you - it guarantees your liquidation. At 100x, a 1% move wipes you out. BTC moves
2 min read
FALSE ASSUMPTION: 🚫 "I'm diversified across BTC, ETH, and stablecoins" → ✅ FACT/Hypothesis: All crypto assets are interlinked - contagion is guaranteed
Hypotheses

FALSE ASSUMPTION: 🚫 "I'm diversified across BTC, ETH, and stablecoins" → ✅ FACT/Hypothesis: All crypto assets are interlinked - contagion is guaranteed

Hypothesis HY10048 FALSE ASSUMPTION: 🚫 "I'm diversified across BTC, ETH, and stablecoins" → ✅ FACT/Hypothesis: All crypto assets are interlinked - contagion is guaranteed Crypto isn't diversified - it's one interconnected system. BTC, ETH, stablecoins, and DeFi are linked through collateral chains, liquidity pools,
2 min read
FALSE ASSUMPTION: 🚫 "Crypto is like volatile stocks" → ✅ FACT/Hypothesis: Stocks have intrinsic value, crypto can go to absolute zero
Hypotheses

FALSE ASSUMPTION: 🚫 "Crypto is like volatile stocks" → ✅ FACT/Hypothesis: Stocks have intrinsic value, crypto can go to absolute zero

Hypothesis HY10045 FALSE ASSUMPTION: 🚫 "Crypto is like volatile stocks" → ✅ FACT/Hypothesis: Stocks have intrinsic value, crypto can go to absolute zero Stocks can't drop to zero - they represent ownership of real assets generating cash flows. Even distressed companies have liquidation value. Crypto has no intrinsic
2 min read
In equities, volatility risk premium is ~3-5% and harvestable. In crypto, VRP swings wildly from -50% to +100%. You cannot determine if options are cheap or expensive.
Hypotheses

In equities, volatility risk premium is ~3-5% and harvestable. In crypto, VRP swings wildly from -50% to +100%. You cannot determine if options are cheap or expensive.

Hypothesis HY10042 In equities, volatility risk premium is ~3-5% and harvestable. In crypto, VRP swings wildly from -50% to +100%. You cannot determine if options are cheap or expensive. Trading hypothesis What traders get wrong False assumption: "Volatility risk premium is predictable (3-5% annualized)." Truth: Impossible to determine
2 min read
Crypto markets are largely unregulated. What would be illegal in stocks - front-running, wash trading, insider trading - is standard practice.
Hypotheses

Crypto markets are largely unregulated. What would be illegal in stocks - front-running, wash trading, insider trading - is standard practice.

Hypothesis HY10041 Crypto markets are largely unregulated. What would be illegal in stocks - front-running, wash trading, insider trading - is standard practice. Trading hypothesis What traders get wrong False assumption: "Markets are regulated and participants governed by law." Truth: Markets are unregulated and traders/exchanges do what
2 min read
Traditional traders assume anonymity. In crypto, every on-chain transaction is public forever. Your wallet, your trades, your timing - visible to anyone who looks.
Hypotheses

Traditional traders assume anonymity. In crypto, every on-chain transaction is public forever. Your wallet, your trades, your timing - visible to anyone who looks.

Hypothesis HY10040 Traditional traders assume anonymity. In crypto, every on-chain transaction is public forever. Your wallet, your trades, your timing - visible to anyone who looks. Trading hypothesis What traders get wrong False assumption: "Individual trader data not available, everything based on aggregates." Truth: Every on-chain crypto trade
1 min read
Unlike stocks with cash flows, crypto has no intrinsic value. Price is purely what others will pay. And 1% of addresses control 90% of supply - manipulation is structural.
Hypotheses

Unlike stocks with cash flows, crypto has no intrinsic value. Price is purely what others will pay. And 1% of addresses control 90% of supply - manipulation is structural.

Hypothesis HY10039 Unlike stocks with cash flows, crypto has no intrinsic value. Price is purely what others will pay. And 1% of addresses control 90% of supply - manipulation is structural. Trading hypothesis What traders get wrong False assumption: "Asset price has underlying intrinsic value. Markets are efficient."
1 min read
Black-Scholes assumes log-normal distribution. Crypto has extreme kurtosis, fat tails, and flash crashes. The model is fundamentally broken.
Hypotheses

Black-Scholes assumes log-normal distribution. Crypto has extreme kurtosis, fat tails, and flash crashes. The model is fundamentally broken.

Hypothesis HY10038 Black-Scholes assumes log-normal distribution. Crypto has extreme kurtosis, fat tails, and flash crashes. The model is fundamentally broken. Trading hypothesis What traders get wrong False assumption: "Black-Scholes log-normal distribution applies." Truth: Crypto has extreme kurtosis (10-20 vs 3 normal), fat tails, and flash crashes that make
2 min read
Options Greeks assume continuous prices, stable volatility, liquid markets. Crypto violates all of these catastrophically. Your Greeks are unreliable.
Hypotheses

Options Greeks assume continuous prices, stable volatility, liquid markets. Crypto violates all of these catastrophically. Your Greeks are unreliable.

Hypothesis HY10037 Options Greeks assume continuous prices, stable volatility, liquid markets. Crypto violates all of these catastrophically. Your Greeks are unreliable. Trading hypothesis What traders get wrong False assumption: "Portfolio and option Greeks are predictable." Truth: Crypto catastrophically violates all core assumptions (stationarity, liquidity, predictable relationships) behind Greeks.
2 min read
Crypto has sudden regime changes and catastrophic single points of failure. FTX, Luna, 3AC - each triggered cascading collapses. Your diversification is an illusion.
Hypotheses

Crypto has sudden regime changes and catastrophic single points of failure. FTX, Luna, 3AC - each triggered cascading collapses. Your diversification is an illusion.

Hypothesis HY10036 Crypto has sudden regime changes and catastrophic single points of failure. FTX, Luna, 3AC - each triggered cascading collapses. Your diversification is an illusion. Trading hypothesis What traders get wrong False assumption: "Markets are mature and efficient." Truth: Markets undergo sudden regime changes and have single
2 min read