A weakness of human nature is the love of gambling. But nine out of ten bets fail, this is not a technical issue, but a universal law that no one can escape.
Speaking of the most eye-catching project in this bull market, none other than OM. It has risen more than 300 times in over a year, fiercer and more enduring than the previously popular TRB, simply a superstar.
However, during its continuous rise, the number of people shorting increased, and as a result? The liquidated funds add up to several hundred million, mostly shorts stepping on mines. Retail operations have become a hard rule: the more it rises, the more they short, the more they short, the more it rises, the hotter it gets, the more they lose, and many have gone bankrupt.
However, just a few weeks ago, OM took a big plunge, completely crashing—within a day it dropped from $6.3 to a low of $0.37, almost halving again and again, down 99%, a true 'bloodbath'.
The situation has started to reverse again, with more and more people going long. Recently, I've seen many people going long on OM, but they got liquidated again.
Is it possible that these people are actually the ones who shorted before, now changing direction to continue pushing?
From Binance's long-short ratio, the proportion of users going long on OM has been increasing, indicating that more and more retail investors are bullish, and this trend continues.
First, the conclusion: Based on the current contract positions of OM, it is very likely that it won't rise for a long time, but will just oscillate within a range, and we cannot rule out the possibility of a sudden spike down. Wanting another big rise is basically hopeless.
Previously it was a short squeeze, now it’s the turn to squeeze the bulls.
We should also reflect on why there are so many retail investors going long on OM now? What problem does this reflect?
After all, retail investors in the crypto space still love to 'buy the dip' and want to catch the falling knife, especially for coins like OM, which previously relied on a 300-fold increase in a year, enough to tempt people to catch the knife.
But looking back at how OM rose in that previous wave, how did it come about? It was because no one dared to buy, retail holdings were low, and there were too many people shorting, resulting in the big players directly forcing a short squeeze and pushing the price up.
But now? The situation has reversed: a bunch of people are starting to buy the dip, the proportion of retail holdings has increased, and the proportion of long contracts has also risen, making it harder to go up.
So can OM still rise? Yes.
But can it skyrocket? Don't think too much about it in the short term.
It is very likely to follow a trajectory similar to the slow oscillation and rise from February to April, only this time it will be reversed, meaning the probability of oscillating down is not small.
Remember a hard rule: retail investors have the least pricing power in the market. All the real players and large holders assume that what retail investors do is likely wrong.
I have also shorted OM, but I controlled my position and acted only after long-term observation and analysis. For OM's spot market, if there’s no obvious increase in volume and no 'spike' market, it's actually not very suitable for going long.
Looking at the data, in fact, OM's spot trading volume has always been low, but the contract trading volume is several times higher. What does this indicate? It indicates that retail investors have low positions in the spot market, light selling pressure, and the big players are maintaining control steadily. In other words, this coin is inherently 'for harvesting' in contracts.
Want to short OM, the key is to keep an eye on the data changes of the contracts.
Looking back, the real big changes in OM's contract data started around mid-March, when nearly $200 million in long positions took profits and exited, which was a key signal. But even so, OM still oscillated sideways for almost a month afterwards, continuously washing out short-term high-leverage longs.
This also indicates a problem: shorting strong coins inherently has a low margin for error. If you want to make money from it, not only do you need patience, but you also need to control leverage. So the number of people who can actually make money by shorting is very few.
If you really want to short strong coins, there are a few principles that you must remember:
Low leverage, high stop loss, long-term approach, and most importantly, do not place orders at the peak of heat and when emotions are most frenzied.
The market occasionally sees some bizarre coins that are basically 'born for contracts'. In such times, the best approach is to go long with the trend, using low leverage, and set a small stop loss; never short against the trend.
Especially for coins with contracts, once a one-sided market appears, it basically becomes a slaughterhouse rhythm.
The biggest problem with retail investors is that they like to short strong coins, thinking 'it has risen too much, it should drop', but every time you choose sides, you should see where the big players and institutions stand, not just rely on feelings.
The direction of the market is often indeed uncontrollable and hard to predict. But some mistakes can completely be avoided. Like those who have been shorting OM for the past year, or those who are now chasing to go long on OM, they are making unnecessary mistakes, and this money is really not necessary to lose.
To survive long-term, following the right direction and respecting the market is more important than anything else.
