The “Russian Doll” Strategy Nobody Is Using (But Should Be)

Added: 2026-05-06

[00:00:00]Welcome back, guys. Today, we are jumping into talk about the Russian doll strategy, a nested pool strategy that's going to be beneficial for those of you that want to have the majority of your capital working for you in concentrated liquidity pools, but in a more hands-off manner. Without further ado, let's dive straight into it. Make sure to like the video below, hit subscribe, and we'll get into the charts. Okay, so just to give a little bit of context for this Russian doll strategy, the idea is that we are setting up multiple different distinct liquidity pool ranges for a given asset pair. And for today's example, we're going to be using BTC paired with something like USDC. You're going to have four distinct ranges from widest to tightest, and we're going to have them nested within each other, so that no matter what happens with price action, the vast majority of your capital is always working for you, but you're still able to execute on concentrated liquidity provision in a more hands-off manner. Okay, as you can see here, we're going to have four distinct liquidity pool ranges. Widest being calculated by using the Bitcoin realized price. The wide range, which is slightly more narrow than the widest, is going to be calculated using some Fibonacci's on the chart, as we'll see.

[00:01:24]The tighter range, we're going to calculate using ATR bands. And the tightest range for our Bitcoin pools here is going to be somewhere in that region of 10 to 12% wide. Okay? We're going to have equal capital distribution across all four pool ranges. That is not mandatory, that is what we recommend, ultimately because it means that you're going to be able to have a blended average across all four of those pools when you start to generate that yield and income. But you could tweak it ever so slightly. If you wanted to be a little bit more aggressive, you could put slightly more capital or more than 50% in the tighter ranges and having slightly less than 50% in the wider ranges, that is ultimately up to you.

[00:02:04]Okay, if we jump over to the chart though, you can see this is looking a little bit aggressive here with all these different ranges, but I'm going to break them down one by one because as you can see here on the chart, the widest range is very, very wide.

[00:02:18]We're talking about a range here from 27,000 up to 162,000 dollars based on the Bitcoin realized price calculation.

[00:02:28]Okay, if you search over on Bitbo, you can find the Bitcoin realized price chart here, and you can see that the realized price for Bitcoin is currently sitting around 54,231 dollars. The dollar-denominated price today is over 74K, but that realized price is sitting at about 54.2. Okay? To set this widest range, what we're doing with this Russian doll strategy is we are multiplying the realized price times three to get the upper end of our range, so that 54.2 * 3 is equal to about 162,000, and we're dividing it by two to get the bottom end of our range here at about 27,000 US dollars. That is how we're defining the widest range of the four here in this strategy. And again, that should be a range that allows you to stay consistently in range earning fees over the course of 6 to 12 months without necessarily having to rebalance.

[00:03:26]The second widest pool, where the second widest range here is going to be calculated using the Fibonacci retracement. Okay, if we jump out here, we zoom out to a weekly chart on Bitcoin, what we're going to do here is we're going to use the fib retracement tool to calculate where was the swing low from the previous low in the previous cycle, and I'm going to bring out that fib retracement tool here. We're going to measure from swing low to swing high here. And the way that we're using this particular fib retracement is we're going to use >> [clears throat] >> uh I'm going to go back 12 months to find the fib retracement level um that is coinciding with at least support over the past 12 months. And you can see here that if we were to use the 0.5 on the fib retracement, that's probably not going to be sufficient because we've had price action below that 0.5 fib retracement over the past few weeks. We can see though the 0.618 on the fib retracement, it lines up nicely with support going all the way back here to 2024. So that's the level we're going to use. And if I remove the fib retracement, you can see that's the level I put in here as the bottom of that second widest range at about 57, 58,000 dollars.

[00:04:40]The top end of it is also measured using the 236 on the fib retracement because again, we have and had a little bit of resistance at this level from when we had that run-up back in January of 2025.

[00:04:55]That gives us plenty of room to the upside, and it's a pretty substantially wide range. If we measure it on a percentage basis, roughly speaking, we're at about 80-ish percent wide.

[00:05:07]Okay, the next range, or the next tight liquidity pool we're going to set, is using the ATR bands. If I jump back in here into a daily chart, zoom, and make this a little bit bigger, there's an indicator in TradingView called ATR bands. We're going to show it here. It actually gives us um the average true range that an asset has been trading at over the past um given time period. In this case, if I click into the indicators and the inputs for the settings on the ATR band, I'm using a 30-day lookback period, an ATR band scale factor of two, and a take profit scale factor of two as well. And we can see that on this chart, those levels come in right around 79.6 and also at about 68, 69,000. Now, what I've done here is I've given a little bit of extra buffer. All I've done is I've made the bottom of this next range slightly below the ATR band low and slightly above the ATR band high, just to give me a little bit of buffer there because what we want to do is we want to have that particular range for Bitcoin around 20 to 22% wide. That is the ideal scenario. You're going to find that the ATR bands get you most of the way there, but giving a little bit of extra buffer above and below those areas is going to be useful. And then the most narrow range that we're going to set here, or the tightest range, is going to be targeting something in the region of 10 to 12% wide. And you can see if I remove the ATR bands, the most narrow pool in here in this area for Bitcoin's price at this moment is from that 70,000 up to 79,000 dollar area. Again, measuring that on a percentage basis, we're looking at about 11 to 12% wide. That's going to be aggressive capture of very good fees when you have tight price action inside that 10 to 12% wide range.

[00:06:58]So that is the setup of all the ranges.

[00:07:00]Now, why does this work? Why is this beneficial? Why should you consider this particular strategy?

[00:07:05]Well, like I said at the beginning of the video, this is going to allow you to capture very consistent fees over a long period of time and always be generating yield and cash flow. It's up to you what you do with that yield and cash flow. You might be taking some of it out for lifestyle expenses, you might be using some of it to reinvest and dollar cost average into Bitcoin even further.

[00:07:28]But what you can see here is again, the fact that you're going to have really good fees in this particular range. You could be earning something like 60 to 70, 80% APR in this most narrow range. In the slightly wider range, you're probably going to be at maybe something between 40 to 60%. In the next most wide range, you're probably going to be at something closer to, you know, 25 to 35 or 40%. And in the widest range, you're going to be looking at something like, you know, 10 to 25% APR. But combined, targeting a blended APR somewhere in the region of, let's say, 30 to 50% is what you can be getting with this type of strategy even on a Bitcoin USDC liquidity pool. Again, you're going to have to let this run for an extended period of time because when you have aggressive moves for Bitcoin, you're going to get very large spikes in APR in these narrow two ranges, which will increase the average over the course of months and a year. And then obviously, during times that are a little bit more boring in terms of price action, when there's not as much volume, you will be earning a little bit below the average here. But blending the rate over the course of these four different pools means that you should be targeting something around 30 to 50% APR on a Bitcoin pool, which is phenomenal. And again, you will have to manage and monitor the narrowest ranges over an extended period of time. But as the price moves, as you use some of your technical analysis skill set, you're going to be able to adjust those ranges, use different types of rebalancing strategies like Snuggles, et cetera, and tweak those pools as price moves up and down. The idea with the widest two ranges is that you're generally not going to have to um execute rebalances on those very frequently. Again, the second most widest pool being 80% wide, again, having those 80% swings in Bitcoin can happen, but they're going to happen over much more extended periods of time. And then the widest pool in that range being um you know, over 100% wide means that you're going to have uh the ability to really sit tight for the long term with that most wide range and probably not have to rebalance um more than every 9 to 12 months. So with this strategy, you get to be very, very hands-off with the widest two pools always generating fees in there. The more narrow two pools, you're going to be executing, you know, slight rebalances maybe every few weeks or every couple of months. So, it's not going to be hugely aggressive. This is a great strategy for someone who wants to be a little more hands-off, not have to stress or worry about doing constant rebalancing, um and you're going to be generating fees pretty much no matter what happens with price action. So, take from this video all of those tips and tricks. Take this strategy, run it for yourself. The beauty of DeFi is that you don't have to run this with tens of thousands of dollars. You can test this strategy with as little as, you know, $50 to $100 spreading that capital across the four different pools nested inside of each other means that you're getting phenomenal fees over the course of weeks and months, no matter what. Run it for yourself. Drop comments or questions below this video, and we'll catch you in the next one.