In this round of the cryptocurrency bull market, the market is exceptionally hot. An institution suffered a painful loss of $189 million due to shorting Ethereum. This incident has garnered widespread attention; why are shorts being 'ground into the ground' in the current market? Why is the bull market so 'unfriendly' to shorts? The logic behind it is worth exploring in depth.
The core reason for the bull market 'strangling' the shorts.
Dual drive from policy and funds.
Significant positive news has emerged from the policy level; Trump plans to include Bitcoin in the strategic reserves, which will undoubtedly enhance Bitcoin's market status and recognition, injecting a strong boost into the market. At the same time, the promotion of related ETF products has brought more liquidity and compliance to the cryptocurrency market, attracting a large influx of funds.
In terms of funds, the market's bullish sentiment is extremely high. Renowned institutions like Harvard have been buying BlackRock's Bitcoin ETF in large quantities, which sends a strong positive signal, indicating that traditional financial institutions are increasingly focused on and recognizing the cryptocurrency market. Traditional funds are accelerating their entry into the cryptocurrency market, further driving up market prices.
While mainstream cryptocurrencies perform strongly, the Ethereum ecosystem is experiencing explosive growth, with its application scenarios continuously expanding and its ecosystem becoming increasingly perfect, which also supports the rise in Ethereum prices. In addition, tokens like Solana and HYPE are also surging in tandem, creating a widespread upward trend in the entire market, with shorts being 'completely besieged' in such a market environment, greatly compressing their survival space.
Leverage trading has become a 'meat grinder' for shorts.
The current market is highly volatile, and the risks of leveraged trading are magnified. Within 24 hours, over 100,000 people faced liquidation, with the liquidation amount nearing $400 million, of which more than 90% were short positions. High-leverage trading is like 'dancing on the edge of a knife', and in a bull market with a clear upward trend, shorting with high leverage poses extremely high risks.
An institution holds nearly $800 million in short positions on the Hyperliquid platform. Due to the continuous market rise, the liquidation price of Bitcoin has been pushed up to $126,000, which makes the margin of error for short positions extremely low. Once the market price exceeds expectations, liquidation is easily triggered, leading to massive losses.
Retail investor pitfall avoidance guide.
Beware of the risks of high-leverage trading.
A case of an institution facing a floating loss of $144 million on Ethereum short positions has once again sounded the alarm for the market, fully exposing the huge risks of high-leverage trading. For ordinary investors, it is imperative to be wary of high-leverage trading and to keep the leverage ratio within 3 times to reduce liquidation risks.
At the same time, it is necessary to pay attention to market dynamics. The market will welcome the unlocking of $2.99 billion in tokens in August, and a large number of token unlocks may impact market prices, so be wary of the risks of 'profit realization' after the unlocking and prepare risk prevention measures in advance.
Keep a close eye on the movements of 'smart money'.
The flow of 'smart money' often reflects market trends and directions. The institutional increase in BlackRock's Bitcoin ETF indicates that traditional funds are accelerating their entry, enhancing the long-term positive expectations for the market. Investors can closely monitor the movements of such institutional funds as a reference for investment decisions.
From the perspective of specific cryptocurrencies, if Ethereum can stabilize at $4,650, the subsequent target may point to $4,800; Bitcoin, Solana, and other coins also have clear support and resistance levels. Investors can formulate investment strategies based on these key points. If Ethereum breaks above $4,700, consider following up; if Bitcoin pulls back near the support level, a small long position may be tested, but stop-loss settings are necessary.
Rational judgment combining policy and on-chain data.
Changes in policy have a huge impact on the cryptocurrency market. If Trump's plan to purchase Bitcoin with tariff revenue is realized, it will become a long-term positive for the cryptocurrency market. Investors need to continuously pay attention to the clarification process of policies.
On-chain data can also provide important references for investment decisions. The increase in net outflow from Ethereum exchanges indicates that large holders prefer to hold onto Ethereum rather than sell, reflecting a long-term optimism towards Ethereum in the market. The number of Bitcoin long-term holder addresses has reached a historical high, and these 'diamond hands' investors are confident, which also indirectly reflects Bitcoin's long-term investment value.
Key reference points for the upcoming week.
Xing Ge's exclusive viewpoint points out that shorting in a bull market is like 'licking blood off a knife edge', with extremely high risks; going with the trend is the kingly way of investing. The significant loss case of an institution warns us that respecting the trend in the market is more important than blindly trying to guess the peak. As policies clarify, market volatility may become more intense, and investors must remain rational in such market conditions, control risks, to ultimately succeed in the bull market.
Don't wait until the contract is liquidated to remember me! Follow Xing Ge, and next time I'll take you to escape the peak 3 seconds in advance!
