Don't short ETH! The main players are in a tight spot, with a $40 billion position hiding a life-and-death trap
Recently, the ETH market has been thrilling: from August 7th it surged from $3700 to $4700 on the 14th, with contract positions skyrocketing from $29 billion to $60 billion! This means the main players' cost is already above $4000.
Insufficient selling liquidity above
If the main players continue to buy chips, the price may quickly rise and break the historical high of $4877. However, most retail investors still remember that ETH was only $1400 three months ago, so no one dares to chase the highs.
Insufficient buying liquidity below
The main players want to close positions below, but there isn't enough liquidity. If they forcibly close positions, the price will drop rapidly, triggering a series of liquidations. Conclusion: The main players can only consolidate or slowly push higher to control risk.
Shorting is just giving away money!
Retail investors shorting will only help the main players pay their funding costs. With a $40 billion position and 5x leverage at an annual interest rate of 5%, the daily funding cost is only $1 million! The more short positions retail investors take, the easier it is for the main players to maintain funding costs and continue to push prices higher.
Strategic conclusion
Do not short now! Low-leverage short positions may ultimately be liquidated, while the main players will continue to push prices higher after waiting for risk to be digested.
Those who understand the market can only patiently observe or participate in the trend, and should not be blindly induced to short by short-term fluctuations.
