Why not try to short easily?
I will talk to you about this issue from the perspective of market makers and liquidity.
1. Market rhythm from the perspective of market makers
Between April and September 2024, the main task of most market makers and project parties is to "absorb chips", that is, to let the chips in the market flow into their hands through various means. In this stage, altcoins and VC coins are particularly typical.
At present, this stage of absorbing chips has been basically completed, and the next main goal is to "distribute chips". The core purpose of distribution is to guide users to buy these chips by pushing up prices and market heat, and transfer chips from market makers/project parties to the market.
This market logic means that in the early stage of chip distribution, prices usually rise, and rash shorting will face huge reverse pressure.
2. Analyze the current market environment from the perspective of liquidity
Liquidity is the core driving force of market growth, and multiple recent macro factors are improving liquidity expectations:
a. Market confidence brought by the election results: After Trump won the election, the market's attitude towards crypto assets has clearly turned positive. BTC's asset attributes have been further upgraded, and the crypto-friendly narrative is expected to dominate the next four years.
b. Ease of compliance pain: This year's compliance pressure has gradually eased, and the market has a clearer regulatory outlook for the future, which provides policy space for risk assets to rebound.
c. Expected improvement in the Fed's net liquidity: At present, the Fed's net liquidity is at a low level, and the recovery of liquidity in 2024 is almost a high probability event. This is a potential positive for all equity assets such as US stocks and crypto markets.
Based on these factors, trying to short a market in an upward trend is tantamount to going against the trend and is extremely risky.
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