Bankless

Why This Crypto Cycle is Over | Michael Nadeau's DeFi Report #7

88 snips
Oct 21, 2025
Guest
Michael Nadeau
Michael Nadeau, founder of The DeFi Report and a savvy crypto researcher, shares insights on current market dynamics. He explains his shift to a risk-off stance, moving 70% to cash ahead of a flash crash due to rising leverage and weakening signals. Nadeau analyzes late-cycle indicators and debates the muted sentiment in this bull cycle. He discusses potential catalysts for a final market push, including global liquidity and AI, while emphasizing the importance of positioning and caution for year-end opportunities.
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ADVICE

Scale Out And Preserve Optionality

  • Scale out of high-risk positions as cycles peak and hold more cash to deploy later in bear markets.
  • Book profits to preserve optionality and sleep better rather than trying to time perfect tops.
ANECDOTE

How He Detected The Flash Crash Risk

  • Michael describes trusting data plus instincts to move risk-off before the October flash crash.
  • He cites prior large liquidation events and rising leverage as reasons for conviction, not a precise prediction.
INSIGHT

Leverage Creates Fragile Market Structure

  • Excess leveraged positions amplify sell-offs because perps create more long exposure than on-exchange collateral.
  • High futures leverage near one-to-one with on-chain supply makes the market fragile to price turns.
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