Why is everyone shorting, yet the market price is rising? Why are altcoin traders so unrestrained in controlling the market?
Contract and spot prices influence each other, but due to market efficiency issues, contracts cannot directly affect prices.
🚀 Placing a short order ≠ selling a spot order; there must be a corresponding long order to establish a position in the market. A short order that cannot be established can only be opened at market price to find a long order at a lower price to accommodate your short.
💰 Spot trading is immediate and reflects directly on the price, while 💻 contracts, as a derivative play, only start to influence the price when you close your position.
Now let's talk about altcoins. Back then, everyone was shorting them, but the traders' spot positions remained unchanged, and they kept buying, directly affecting the price upwards. Your contracts cannot directly influence the market and get liquidated.
The USDT you keep losing from being liquidated 💵 does not flow into the exchange's pockets but instead becomes the main force for traders to push the price up.
