Uncle An talks about the cryptocurrency market, why is it that when shorting the gainers list, you lose 80% of the time?
First, let's do the math: going long on 10U, you might lose the maximum, but your gains can be unlimited; going short is just the opposite, you can gain only 10U, but your losses can be endless, the gainers list is a natural graveyard for shorts.
The cryptocurrencies on the gainers list are driven purely by emotions, retail investors FOMO into it, and shorting is just going against the entire market sentiment, it's purely self-harm.
Moreover, these types of coins typically have small circulating supply, and the major players can easily push the price up, making your stop-loss their buying power.
Additionally, the volatility is fast and liquidity is poor, what seems like a pullback is just a washout, and right as you enter, the price can skyrocket.
When the shorts are concentrated, the funding rate can also press you in the opposite direction, the longer you hold, the higher the cost, and your mindset and capital can collapse completely.
What's even more fatal is that people tend to greedily chase after those small gains at the top, but the crazy market never adheres to rationality, the extremes far exceed expectations.
Uncle An's advice: stay away from the gainers list, missing out is not a loss.
If you really want to trade, first set a risk limit, only choose high liquidity targets, stay away from small-cap coins, and wait for the sentiment to cool down and the volume to decrease before making a judgment.
In the cryptocurrency market, it’s not about accurate predictions, it’s about surviving longer; going against the trend of the gainers list is a gamble not based on technique, but on market sentiment.
Don't just look at XMR skyrocketing and short it at high levels, assess the current heat before deciding on operations!
Follow Uncle An @安叔复利之路 , and I will help you avoid pitfalls and ensure steady profits.