$FHE Why is it that coins that are shorting the rising list generally suffer heavy losses?
Let me do a simple calculation for you:
Going long: Invest 10U, even if it goes to zero, you will lose at most 10U;
If the market price doubles, the profit could be 20U, 30U, or even hundreds of times—profits are unlimited.
Going short: Invest 10U, even if it goes to zero, you will gain at most 10U;
However, if it continues to surge, the losses are unlimited—risk exposure is huge.
Why is shorting the rising list so dangerous? Here are the painful lessons:
Market sentiment and FOMO frenzy.
Coins on the rising list naturally attract attention.
Retail investors frantically chase the rise, and shorts become “fuel”;
When you short, you are fighting against the greed of the entire market.
Market manipulation and short squeeze traps.
Many coins that surge have extremely low circulation, making it easy for manipulators to control.
They can easily create a short squeeze, forcing you to liquidate and cover.
High volatility and low liquidity.
Prices can skyrocket, but depth is very poor;
You think it’s a pullback to short, but it’s just the manipulators washing out before pushing up again.
Funding rate backlash
When there are many people shorting, the funding rate may turn negative, and you may end up paying money to the longs;
The higher the holding cost, the more losses you incur.
Psychological traps: always wanting to catch the peak
You always think that after a surge, there must be a substantial drop,
But the market's madness can far exceed your imagination.
Survival rules for rational traders:
Avoid the rising list, better to miss out than to make a mistake;
If you must participate, use options or hedging to limit risks;
Only trade highly liquid coins, stay away from low market cap altcoins;
Wait for sentiment to cool and trading volume to shrink before judging direction.
The crypto space is a battlefield dominated by emotion and funds; shorting coins in a frenzy is betting against the most frenzied forces in the market.
Do not overestimate your rationality, and do not underestimate the inertia of trends.
