Hey there, meme coin enthusiasts! If you’ve been scrolling through X lately, you might have stumbled upon an intriguing thread by @EsseklerleDans. This trader, who’s been in the game since 2018, spills the beans on a Dynamic Liquidity Market Maker (DLMM) strategy that’s been working wonders for them—especially with those wild meme coins. Let’s break it down in a way that’s easy to digest, even if you’re new to this crypto world.

What’s DLMM, Anyway?

First things first—DLMM stands for Dynamic Liquidity Market Maker, a fancy term for a system on decentralized exchanges (like those on Solana) that helps traders provide liquidity and earn fees. Think of it as a smart pool of funds that adjusts to market moves, making trading smoother. The twist? This trader uses it to tackle meme coins, which are notoriously unpredictable. They’ve been experimenting with DLMM since mid-2023 and swear by a strategy built around Fibonacci levels—a tool that predicts where prices might bounce or reverse.

The Strategy Unveiled

The thread kicks off with a quirky zombie-themed image (check it out above!) that screams, “Use your brain!” It’s a playful nod to the need for smart decision-making. Here’s the core of their approach:

• Trendlines Matter: If a meme coin’s price breaks a trendline upward, it’s time to jump in. If it breaks downward, get out fast. Simple, right?
• Resistance and Demand Zones: Look for obvious spots where the price tends to stall or bounce. Avoid those tiny 15-second chart ranges—focus on bigger moves.
• Untested Highs: If a coin hits an old high that hasn’t been tested, there’s a 90% chance it’ll bounce. Keep an eye on those levels!
• Fibonacci Magic: This is the star of the show. The trader relies heavily on Fibonacci retracement levels (like 0.618, the “golden ratio”) to time entries and exits. These levels act like support or resistance zones where the price often reacts.

Risk Management Across Zones

The strategy isn’t just about jumping in—it’s about knowing when to play it safe or take a gamble. The trader breaks it down into six “boxes” or market conditions, each with its own vibe:

• Box 1 - High Risk Zone: When hype is high (think $100k TVL and $500k volume in 5 minutes), it’s a madhouse. Unless you’re glued to your screen, sit this one out.
• Box 2 - Mid Risk Zone: As volume slows (e.g., $75k TVL, $120k volume), the 0.618 Fibonacci level can offer a bounce for coins with a $2-3M market cap. Use an 80% bid-ask, 20% spot SOL mix and take profits early.
• Box 3 - Low Risk Zone: Here ($40k TVL, $30k volume), the pool quiets down, and you can rake in fees. Position yourself below the 0.786 level for steady gains.
• Box 4 - Mid Risk Zone: With rising TVL ($80k) and spiky volume ($20k), buy the trend or add positions on trendline touches. Timing is key.
• Box 5 - Mid Risk Zone: If momentum fades ($100k TVL, $30k volume), exit on a trendline break. Don’t stick around for a choppy market.
• Box 6 - High Risk Zone: Low TVL ($15k) and volume ($3-5k) can still print profits on a pump, but watch for rug pulls. Take profits and run!

Why It Works for Meme Coins

Meme coins like Dogecoin or Shiba Inu thrive on hype, not fundamentals. The trader notes that 90% of their counterparts don’t use technical analysis, making these strategies a hidden edge. By combining DLMM with Fibonacci levels, you can ride the waves of volatility while managing risk. Plus, the examples from past trades (linked in the thread) show real results—check out the charts for $USEFUL to see it in action!

Tips for Getting Started

Feeling inspired? Here’s how to dip your toes in:

• Learn the Basics: Get comfy with DLMM on Solana and how liquidity pools work.
• Practice with Small Amounts: Test the strategy with a tiny investment to avoid big losses.
• Stay Updated: Follow traders like @EsseklerleDans for more insights.

This DLMM strategy isn’t a get-rich-quick scheme—it’s about using your brain (as the zombie reminds us!) to navigate the wild world of meme coins. Whether you’re a newbie or a seasoned trader, give it a shot and see if it fits your style. Got questions? Drop them in the comments, and let’s chat!

Published on July 31, 2025, by Meme Insider at meme-insider.com.