When Trump calls for restrictions on AI chip exports, the contract $ARM starts moving. The price shot up to 406.64, nearly a 6% increase in 24 hours, but looking at the funding rate, it's at 0.00056, which means the bulls are paying the bears every 8 hours. The open interest is at 15629 contracts, which isn't particularly high, but with the funding rate at this level, the cost for those chasing longs is accumulating quickly.
The reasoning is straightforward; Trump's tech restrictions have the market believing that core chip design companies like ARM will benefit, leading to a flood of capital into the contract market. Prices and rates are both climbing, creating a classic long squeeze setup. With rising prices and positive funding rates, longs are stacking up costs, and as soon as the price consolidates or pulls back, the bulls will start to liquidate in a panic.
I'm not chasing longs here; I'm waiting for structure. If the price stabilizes above 400 and oscillates to digest the funding rate, there might be another push up. But if it breaks below 400, once the bulls start taking profits, combined with the high funding rate, it could easily trigger a downward wave. My plan is to open a short position if it breaks below 400, with a stop loss around the previous high of 415, and aim for a take profit at 385, risking 20% of my position to catch a pullback. The risk-reward ratio for going long here is too low; better to wait for short opportunities.
Trading Tag: #TradFi #链上美股 #ARM
Is Trump's move bullish or bearish for ARM?
The reasoning is straightforward; Trump's tech restrictions have the market believing that core chip design companies like ARM will benefit, leading to a flood of capital into the contract market. Prices and rates are both climbing, creating a classic long squeeze setup. With rising prices and positive funding rates, longs are stacking up costs, and as soon as the price consolidates or pulls back, the bulls will start to liquidate in a panic.
I'm not chasing longs here; I'm waiting for structure. If the price stabilizes above 400 and oscillates to digest the funding rate, there might be another push up. But if it breaks below 400, once the bulls start taking profits, combined with the high funding rate, it could easily trigger a downward wave. My plan is to open a short position if it breaks below 400, with a stop loss around the previous high of 415, and aim for a take profit at 385, risking 20% of my position to catch a pullback. The risk-reward ratio for going long here is too low; better to wait for short opportunities.
Trading Tag: #TradFi #链上美股 #ARM
Is Trump's move bullish or bearish for ARM?