In the crypto world, attempting to short the cryptocurrencies on the gainers list is often one of the fastest ways to incur losses.

The logic behind this can be understood with a simple formula:

Going long: Invest 10U, in the worst case it goes to zero, losing 10U; but theoretically, the upward potential is unlimited.

Going short: Invest 10U, in the best case it goes to zero, gaining 10U; but if it continues to surge, the losses are unlimited.

Why is shorting the gainers list so dangerous?

You are going against the emotions of the entire market.

The gainers list is the market's “hot search”, attracting everyone's greed and FOMO (fear of missing out). By shorting, you are effectively standing alone in front of a stampede.

You might be the “fuel” for the whales.

Many surging cryptocurrencies have a very small circulation, with high control from the whales. They love to see people shorting, as this creates conditions for their subsequent “short squeeze” — forcing shorts to close positions by pushing prices up.

Liquidity traps.

These coins usually have trading volumes concentrated in a few addresses, with poor depth. What you think is the “top” is often just a relay station for the whales' wash trading; the next second it might continue to rise, and your short position is instantly submerged.

The backlash of funding rates.

When most people are shorting, funding rates may turn negative. This means you may not only incur losses but also need to continuously pay the long holders, causing your holding costs to rise.

The biggest illusion: thinking “after a big rise, it should fall”.

The market's irrationality can persist far beyond your imagination. Trying to “escape the top” is essentially predicting the peak of market sentiment, which is almost Mission Impossible.

The survival mindset of rational traders:

Better to miss out than to make a mistake. The gainers list is an observation zone, not a counter-trend trading zone.

If you must participate, please use options. Buying put options can lock in maximum losses in advance, avoiding unlimited risks.

Only operate on high liquidity targets. Stay away from those low market cap, poor depth “meme coins”.

Wait for emotions to cool down. Real turning signals usually appear after a surge, with shrinking trading volume and the market no longer being euphoric.

In this market driven by emotions and funds, shorting the gainers list is like betting against the most frenzied forces. In the long run, this is not a wise “trade”, but a dangerous “gamble”. The first step to protecting your principal is to recognize which battlefields you shouldn’t enter at all.