Famous in One Battle: From Losing 1.5 Million to Earning 500,000 -- My Layer Short Selling Life-and-Death Battle, Full Process Review!

1. What you think is 'overvalued' may just be the beginning

$LAYER FDV 1.8 billion, TVL only 100 million? I decisively shorted, but the operator pushed it to 3.3U, with an unrealized loss of 200,000 dollars.

Lesson: The market can be irrational for a long time, don’t use valuation to fight against the trend.

Short selling is a hellishly difficult game

2. Short selling is a hellishly difficult game

The operator makes money by exploding short orders, no liquidity on-chain? Prices still soar.

3. On-chain data doesn’t lie

When I found out that large holders were recharging Layer,

I knew: the harvesting had begun. Key indicator: the number of large recharge transactions suddenly surged = precursor to a crash!

4. Block out the noise to seize opportunities

Calmly analyze, patiently wait.

Now I must write for every order:

✅ Entry logic

✅ Maximum loss

✅ Allow margin call?

Reject all impulsive orders of 'feeling it will rise'!

The market specializes in treating all forms of disrespect; only by surviving can hope be seen. If you have ever resisted orders to despair, remember – discipline is the ultimate Alpha!

In the past six months, I have been like a stubborn short-seller sniper, from FOMO Trump Coin to bloody battles with Layer shorts, closely watching the bubble of altcoins. Today, I want to talk about this magical journey from frenzy to awakening, from disastrous losses to turnaround.

Disclaimer: My short selling has no insider information; I do not know the team, and have no grievances with them.

Why do I insist on being bearish? The core logic is 'macro tightening + capital outflow + depletion of altcoins'. This cycle has no new retail investors and no innovation bringing in external liquidity.

The 72-hour magical drama of Trump Coin

On the morning of January 17, 2025, Trump suddenly issued a coin. At that time, my thoughts were:

🤔 'Presidential concept coin? Leading narrative?'

💰 5U speculative buy

🚀 Saw the community FOMOing into madness

💸 10U added position

Then... at 3 AM the next day, Melania Coin appeared out of nowhere.

Then a dramatic twist:

$TRUMP began to be drained

A huge sell order appeared on-chain

So I decisively liquidated, preserving most of my profits. Watching $TRUMP later drop back to 15U, I realized: 'Celebrity coins are like fireworks, dazzling but fleeting!'

Since then, I liquidated my SOL, and a series of operations yielded good returns:

✈️ 1.5U shorting Melania Coin;

💣 0.74U shorting RED;

☠️ 1.54U shorting PI;

All shorts were going according to script... until encountering $LAYER.

When 'rational analysis' meets 'operators playing unfair'

On April 10, I was staring at the on-chain data of $LAYER for comprehensive analysis: 'TVL only 100 million, FDV dares to hit 1.8 billion? Market cap surprisingly exceeds industry leader Eigenlayer? The project party casually changes the unlocking date, it’s like playing Monopoly!

Isn’t this a clear shorting opportunity?' I was as excited as discovering a gold mine, and directly acted.

Two days later: 📈 +53% (My expression 😱👉🤡👉💀)

On-chain detective moments in the dark

When the price rose against the trend, I blocked out external noise and began investigating data with some friends focused on-chain, studying on-chain capital movements, and reviewing many contract call records. I found that most of $LAYER's increase came from a very few addresses 'pulling themselves up'.

Based on the trading volume distribution, it can be seen that there was almost no trading volume above $1.5, retail investors were no longer picking up, so why was the price still rising? The main three reasons are:

(1) The funding rate for the draining short positions exploded;

(2) The operator's long positions had not yet started to take profits or had insufficient buyers to offload;

(3) Waiting to sell the high positions of the airdropped rat trading before the major unlocking in mid-May, currently not sold out;

I firmly held my view and once again increased my layer short position around 2.9U.

When the price shot up to 3.3U, my account had an unrealized loss of 200,000 dollars, plus a huge daily funding fee.

The only thing I did was: patiently wait!!!

When the waterfall came

On May 12, Layer began free-falling:

3.2U → 2.1U (This is a technical adjustment)

2.1U → 1.4U (This adjustment is quite persistent?)

1.4U → 0.9U (Funding rate skyrocketed)

At that time I was at the Token2049 venue, suddenly my phone vibrated crazily. I opened it to see:

The trading group exploded: 'Elizabeth, did you close your Layer short?!'

I: 'What's the rush, let the bullets fly for a while~'

Although I ultimately profited and exited, I have been reflecting on the entire trading process, did my judgment have any issues? How can my trading system be deeply optimized?

Attached is my trading template, let’s encourage each other!

Next tweet teaser, how to judge a project's valuation? How to price a coin?