Why is shorting the gainers list often a losing proposition? $ZEC
Let’s do a simple calculation:
Going long: Invest 10U, even if it goes to zero, you can lose a maximum of 10U; if the market price doubles, your profit could be 20U, 30U, or even hundreds—unlimited returns.
Going short: Invest 10U, even if it goes to zero, you can only make a maximum of 10U; but if it continues to skyrocket, there is no upper limit on losses—huge risk exposure.
Why is shorting the gainers list so dangerous? Here are some hard lessons:
4 Market sentiment and the FOMO frenzy
The cryptocurrencies on the gainers list naturally attract attention.
Retail investors chase the rise madly, making shorts the “fuel”;
When you short, you are going against the greed of the entire market.
G Market manipulation and short squeeze traps
Many skyrocketing coins have extremely low circulation, making it easy for manipulators to control the market.
They can easily create a short squeeze, forcing you to liquidate your position.
High volatility and low liquidity
Prices skyrocket, but depth is extremely poor;
What you think is a pullback to catch the top is actually just the manipulators washing the market and pushing it up again.
3 Funding rate backlash
With many people shorting, the funding rate could turn negative, meaning you might have to pay the longs;
The cost of holding increases the longer you hold, leading to greater losses.
Psychological trap: Always wanting to escape the top
You always think that after a surge there must be a big drop,
but the market's madness can far exceed your imagination.
Survival rules for rational traders:
- Avoid the gainers list as much as possible; it’s better to miss out than to make a mistake;
- If you must participate, use options or hedges to limit risk;
- Only trade high liquidity coins, stay away from low market cap speculative coins;
- Wait for the emotional cooling and the contraction of trading volume before judging direction.
The crypto world is a battlefield dominated by emotion and capital, and shorting coins in a frenzy is betting against the most insane forces in the market.
Don’t overestimate your rationality, and don’t underestimate the inertia of trends.