I don't know how many people listened to my last reminder about reef, asking everyone to continue shorting and not to buy at the bottom.
I will continue to analyze this coin.
We analyze the changes in futures and spot prices to see whether the market makers are closing long positions and opening short positions, preparing to end the market crash. Let's think from the perspective of the market makers.
Both closing long positions and opening short positions by the market maker are selling actions, but the volume of the long and short positions of the market maker must be extremely large. If the volume of positions held is not enough, there is a probability of loss when pulling the market. When the inverted pyramid collapses, there may not be many people to take his chips.
Since his order volume is extremely large, there will be two extremely obvious changes in the position data and futures prices, and there will be an auxiliary change on the chain to supplement it.
1. The contract open interest first drops sharply and then rises again, because this is a process of closing a long position and opening a new short position.
2. Because closing long orders and opening short orders are both selling operations, the dealer wants to perfectly close such a large order and open a short order at the same time. The only way to do this is to continue to pull the spot madly, prompting retail investors to see the huge price difference and continue to buy futures to provide themselves with futures short-selling buying orders, so that their short orders can be successfully completed. Just like yesterday's gas, and then they frantically sold and closed longs in futures. This period of currency price increase will produce a huge price difference, which may be more than 30%. Previously, the price difference of ygg in this stage reached 50%, polyx 40%, and loom 30%.
During this period, there will be a very interesting price change. I have observed it on loom and polyx. The spot price of loom on that day (21:00 on October 15) reached the highest of 0.5. The futures price was 0.41 during this period, and then the futures price fell to 0.2796 within an hour, and the futures price reached 0.366. If you use the 1-minute line to look at the changes in this period, it will be more interesting. Interested friends can compare the K-line. This definitely includes a huge amount of closing longs and opening shorts. The buying orders of retail investors and the orders of market makers cannot support the orders of the dealers in such a short period of time, which will naturally cause a huge price difference between futures and spot.
In the next few hours, the loom futures price actually caught up with the spot price. The spot price only rose by 10% from 0.36 to 0.4, but the futures price actually rose from 0.29 to 0.3866. This is definitely the bloodiest operation. Even if many players predict from the huge price difference between futures and spot that the dealer should have built a short position or that the loom price should have reached its limit and participate in short selling, this last pullback can still kill the smart money here.
After the huge futures-spot gap was generated, the price of the currency rebounded and killed the short orders before it died. This also happened to hifi and polyx. The magnitude may not be so exaggerated, but it is still fatal. The price of hifi basically reached its peak on the day the contract was launched. The futures price continued to fall, but the spot price did not move at all. The dealer used a small amount of money to drag the spot price and smash the futures market so that retail investors would feel that they were profitable in terms of funding rates and price differences after seeing the price difference, so as to provide the dealer with a counter-closing and complete the position building operation. Within a few hours, the futures price of hifi fell from $2.6 to $1.3, and the spot price was still $2 during the period. Smart funds must have judged that this was the tail of the fish, but they were still killed in the next five hours. The futures price rebounded to $2 and tied the spot price, killing this wave of smart funds. Then, just like loom, the real plunge began. The same is true for polyx. If you are interested, you can read the K-line yourself.
The same scene happened to gas. If you are interested, you can study the K-line.
3. The third point is the change in the on-chain action, which may help to judge the end of the real TRB market. TRB has been withdrawing coins from Binance, causing the price to rise due to scarcity, and the same was true for Loom at the time. However, these operations will stop before the market makers crash the market.
Next, let us think about this: if the dealer withdraws all the chips he buys every time, how can he crash the market without recharging the chips back to the exchange?
First of all, the chain will definitely be monitored by countless people. Once you transfer to the exchange, retail investors will act faster than you. This is definitely not what the market makers want to see. You are making money from me, how can you act ahead of me?
As a banker, the most correct operation is to stop withdrawing coins from the exchange a few days or a dozen hours before preparing to crash the market, and at the same time, raise the price sharply to collect chips for crashing the market. It can even be done in this way that the banker buys 1 million US dollars and only withdraws 100,000 to confuse retail investors. The external feature is that the changes that we retail investors can see are that the price is still rising and the speed is faster than ever before, but there are few actions on the chain. This is the last supper before the death of retail investors.
Simply put, when the coin price is rising the fastest, the on-chain action disappears or is very small. It can also be used as an aid to determine whether a fishtail market is occurring or whether a crash is about to begin.
What will reef become in the future? It is likely to be a zombie with lost trading volume.
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