Under the current market conditions, many people are asking whether shorting is suitable. Here are some insights into the current market and short selling strategies:
Situation Analysis:
Currently, there are no major sentiment-moving events in the BTC market. It is worth paying attention to the situation of the ETH ETF on May 23, which mainly affects ETH. Whether it passes or not, the market sentiment will be hyped. Anyone who has experienced BTC understands this. Next is next month's inflation data. The interest rate meeting is scheduled for June 11-12 to discuss the possibility of cutting interest rates. Aside from interest rate cuts, there are no other major recent events that could significantly impact market sentiment.
Market Sentiment Watch:
The direct way to observe market sentiment is the trading volume and trend of BTC in the early morning every day, paying special attention to ETFs and capital flows. These factors basically sum up the current market dynamics.
Short selling strategy:
Short term (1-10 days): The current market is subject to frequent fluctuations. A piece of news may cause the price to fall quickly and then rebound quickly, and the winning rate is not high. Short-term shorting is not recommended unless you have a special information advantage.
Medium term (10-30 days and above): Many are betting on rate cut expectations. Cutting interest rates is effectively acknowledging a recession. Looking back at the situation in 2019-2020, the first interest rate cut was in July 2019, followed by the second and third interest rate cuts in September and October respectively. You can refer to the comparison chart between the S&P 500 trend and BTC.
Regarding interest rate cuts:
Many people think this time is different because ETFs will support the bottom and will rise instead of falling. If you think so, then shorting is clearly not for you. We will wait and see whether ETFs dare to buy under the pressure of interest rate cuts.
High position short selling strategy:
If you think a rate cut will lead to a decline, it may be too early to go short. Suppose you plan to invest $2,000, which can be done in four installments. Each time, you invest $500 when the price rises, and set a stop loss price at the same time. Even if the ETF enters the market to support the trend and the trend reverses, you can stop the loss as soon as possible and leave the market. This strategy is feasible for shorting at high levels, but the key lies in execution and patience. Can you combine knowledge and action? Can you persist for more than a month? Measure your odds carefully.
Ultimately, shorting requires careful decision-making and disciplined execution. If you can grasp market sentiment and have a suitable strategy, you may be able to profit from this market wave.
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