š Is the short-selling craze for altcoins a crisis or an opportunity?
š Recently, several altcoins in the cryptocurrency market have been subject to a large amount of short selling, but will this be a bullish signal? Let's take a look.
š According to data from Santiment, traders have recently chosen to short 1inch, Tron and Stellar. The number of short positions in these three assets has increased significantly since the beginning of this month. This seems to be a wise strategy as the entire cryptocurrency market has recently seen a correction.
š Specifically, Tron has fallen 6% since the beginning of this month, and XLM (Stellar) has also fallen 5%. But interestingly, 1inch has risen by about 4% against the trend.
š” At the same time, Santiment also put forward an interesting point that so many short positions may be the "rocket fuel" for the rise in the prices of these assets. Because if the market reverses, these short positions may be forced to close, thereby driving prices up.
š¤ So, does this mean that we should do the opposite and buy when everyone is shorting? This reminds me of Warren Buffett's famous quote: "Sell when others are greedy, buy when others are fearful."
š Finally, in similar situations, there is also the view that opposing or even "skeptical crowds" may be beneficial. In other words, when most people are shorting, we should perhaps consider going long.
š¬ For the large amount of shorting in these three altcoins, do you think this is an overreaction of the market, or is there a real risk of falling? Is it a positive signal for the rise? Leave your opinion in the comment section!
