Foresight Ventures: How to profit from shorting in the imitation coin market

Foresight Ventures: Shorting the imitation coin market for profit.

Short selling is more likely to occur in small market cap or low trading volume altcoins. Especially in the high-leverage crypto market, continuous forced liquidation can cause a waterfall effect, resulting in more drastic price changes. Jonas, the author of Foresight Ventures, introduces several key indicators for short selling and explains how to profit from it.

Several key indicators for short selling transactions: 1) Funding rate of the contract: The premise of short selling is that the short position overwhelms the long position. Specifically, when the funding rate of a certain altcoin contract exceeds -0.1% (that is, the daily interest rate of short positions is 0.3%, and the annual interest rate exceeds 100%), it indicates that the short-term bearish sentiment is extreme. If it exceeds -0.75%, it will accelerate the rise further.

2) Contract open interest: The closer the contract open interest is to the circulating market value, and the closer the contract trading volume is to 50% of spot trading volume, the more likely a short squeeze will occur. If the open interest increases by more than 50% in the short term, it means that the main capital is entering. If the open interest decreases, it means that the main capital is retreating, and profit-taking is needed.

3) Chip distribution: Applicable to manipulative short selling by market makers. The more concentrated the chip structure, the more extreme the market volatility.

The risks of short selling transactions: 1) Cryptocurrency exchanges may temporarily modify rules. 2) The value regression of altcoins. There is a commonly used indicator of a market top, which is the comparison of the spot (or contract) trading volume of the altcoin with the king of altcoins, ETH. From historical data, once the spot (or contract) trading volume of the altcoin exceeds or approaches ETH, it is likely to be a short-term emotional peak.

Reference: https://foresightnews.pro/article/detail/35186

We will continue to update Blocking; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

Blockchain

OK Jumpstart and then the exchange "new hot" rules are too complicated for users to "do not understand"?

This afternoon, the digital asset exchange OKEx officially announced the sales rules of OK Jumpstart. The rule shows ...

Blockchain

Alameda Engineer SBF stole my life savings

As an engineer at Alameda Research, my entire life savings were stolen by my former boss, Sam Bankman-Fried (known to...

Blockchain

The FATF's strongest regulatory new regulations have come, and the exchange's "resistance" will be held at the end of the month.

The world's mainstream cryptocurrency market – the United States, Japan, South Korea, China, how long is i...

News

Visit: What is behind the brush of the digital currency exchange?

Recently, TokenInsight released the blockchain industry report "Exchange Real Estate Volume Report (I)" poi...

Blockchain

Xiaoyan follow-up: CZ, Nathan Kaiser, ten "big coffee" in the same box, market, trading, technology, all the nets

The Asian Block Summit was held in Taipei on July 2nd and 3rd. The summit focused on “blockchain business ...

Blockchain

0.32 dollars to buy 40 bitcoins: the currency exchange will not work hard, the regular army will come

Summary Event: On August 23, the Amazon AWS cloud service failed, causing many currency exchanges such as the currenc...