Why does the price soar when everyone shorts? Uncovering the ultimate trick of the market makers!

I often get asked: why is it that when everyone is shorting, the price keeps skyrocketing? Is the market insane? Today, I'll give you the hard facts and also expose how altcoin market makers blatantly take your money!

First, you must understand: shorting contracts ≠ selling spot! Shorting is just the next bet, and every short position must correspond to a long position. When you place a short order, there must be a counterpart taking the other side. If no one is going long, your short order cannot be executed—unless you actively lower the price to find someone to take it.

What really determines the price is the spot market; contracts are merely followers. When the spot price rises, contracts have to follow; but if contracts want to lead the trend? Difficult!

A typical example is altcoins. Even if the funding rate is -2%, the price still climbs. Why? The market maker hasn't sold any spot at all; instead, they are continuously buying. If the spot doesn't collapse, how can the contracts drop? The funding rate mechanism is designed to keep the contracts from diverging. If you see a coin with a long-term absurdly negative funding rate (like -0.5%), don’t doubt it; there’s definitely a market maker controlling the price!

In simple terms:

The spot is the boss, and the contract is the son.

Market makers can manipulate prices because they hold the vast majority of the spot. For example, if there are 1000 coins in total, and the market maker holds 990 of them, they can easily set a high price and buy them back, 'stepping on their own feet' to the sky. Market selling pressure? There are only 10 coins from retail investors. You can sell or not; it doesn’t hurt the market maker at all.

Now you understand why some coins only go on contracts and not on the spot, right?

Because no spot = no real price = market makers can draw any K-line they want 🖊️.

To the brothers who are shorting, you’re not fighting against the market,

You’re competing with the market makers to see who has bigger guts…#合约爆仓 #加密市场回调