My post on the logic of long orders for dogs is as follows
Someone mentioned in the comments that the newly listed DOGS on Binance also has this kind of ups and downs trend. I will use DOGS as an example to explain how market makers rely on short contracts to ship goods, hoping to help everyone understand better. (It is recommended to look at it together with the following picture)
The contract trading volume of DOGS on Binance in the past 24 hours was $580 million, while the spot trading volume was $110 million. The liquidity of the contract is more than 5 times that of the spot, which is enough to show how good the contract liquidity of the copycat is. DOGS was launched on August 26, and the highest price reached 0.0018. It fluctuated downward for the next two days. It rose 35% in two hours from 4 to 5 pm on the 28th. It then remained at the high point for less than five hours from 6 to 11 pm and began to plummet at 12 o'clock. The current low has fallen 32% from the high point. What happened on the 28th? You can see it at a glance by looking at the funding rate and open interest of coinglass.
At 12:00 on the 28th, the funding rate suddenly rose to 0.0385% (usually 0.01%), but you will find that in the next funding period, that is, at 8:00 on the 29th, the funding rate was instantly smashed to 0.0087%, while the open interest here hit a new high of 150 million US dollars. So what happened? After the 35% increase between 4 and 5 o'clock on the 28th, retail investors began to chase highs, pushing the long funding rate of the contract to 0.0385%. At 12 o'clock, the market maker saw that the car was almost full, so he opened a short order, and the time for opening the first batch of short orders was from 12 o'clock on the 28th to 8 o'clock the next day (the hell time when domestic retail investors were sleeping), and then there was a continuous spot market crash at highs, and short positions were built at highs in the contract. You ask me if the dogs have finished smashing? Let's go back to the funding rate and open interest. The funding rate has fallen to 0.0023%, and the currency price has fallen by 35%, but the open interest is still 123 million. Why? Because not only did the market makers not close their short positions, they also kept adding short orders at every rally high, and the spot goods were also being shipped out slowly.
So how do you know that the market maker has sold all his stocks? There are two leading indicators. One is that the open interest has decreased, and the other is that the funding rate has returned to normal. This probably means that the market maker has closed his short position. But when to pull the market up depends entirely on the market maker's interpretation of the market. There are too many factors, so I won't go into them here.
(The following figure shows the open interest, funding rate, and Binance price trend of Coinglass's DOGS contract. You can read it together with the above. In addition, because my time zone is different, Coinglass will show the delivery time as 7 o'clock and 11 o'clock, which is actually 8 o'clock and 12 o'clock China time)
Finally, I want to say that it seems that everyone’s interest in the secondary market is much greater than that in the primary market. Few people read the primary market maker’s practical guide that I wrote for a long time before, but many people read the secondary market maker’s guide on how to ship new coins that I wrote before going to bed yesterday. Alas, maybe everyone has suffered from new coins for a long time. If you have any questions, please feel free to ask them at any time, or if you have any content you want me to share next time, you can also leave a message to tell me. I am currently planning to talk about the dealer’s operation methods of pure dealer coins such as high, loom, hifi, and gas in the next post, as well as how retail investors should trade. Finally, thank you for your support. I hope it can help everyone. If you like the content I share, please like and forward it. Thank you!#非农就业数据即将公布 #BTC走势分析 
