In recent market analysis, I seem to have become the "Air Force Commander" and conducted intensive short-selling analysis on the trends of various altcoins. This is not random, but based on multiple market observations and logical deductions. The following are several core reasons why I prefer short-selling:
1. Market sentiment: Greed is out, rationality is back
The price fluctuations of altcoins are usually highly correlated with market sentiment. In a bull market, FOMO (fear of missing out) will push up these currencies, but recently we can clearly feel that market sentiment has begun to cool down. As liquidity decreases, investors' attention has returned to mainstream assets such as Bitcoin and Ethereum, and the "hot halo" of altcoins has begun to fade. At this time, shorting altcoins is more in line with the changes in market sentiment.
2. Technical indicators: Weak rebounds, implicit downside potential.
Recent technical analysis of altcoins shows that most cryptocurrencies exhibit weak rebound characteristics:
The RSI is in a neutral or slightly high area, indicating limited upside potential.
Multiple moving averages show price pressure, forming clear resistance levels.
Trading volume is shrinking, and the market lacks new capital to support upward movements.
These technical signals collectively indicate that altcoins are more likely to experience a pullback rather than a direct reversal upward.
3. Lack of fundamental support: Project value is difficult to sustain.
The altcoin market is a highly speculative field, with many projects lacking practical application scenarios or value support. Once market sentiment cools, investors are more likely to doubt the long-term value of these projects. Especially for coins that have lost their popularity, their price fluctuations are more driven by 'manipulation' or 'hype remnants,' losing fundamental support and naturally becoming targets for shorting.
4. Global economic environment: Impact of liquidity contraction.
As global central banks gradually enter a tightening cycle, market liquidity has become scarcer. Cryptocurrencies, as high-risk assets, are the first to suffer from capital withdrawal pressure. The risk premium of altcoins is higher than that of mainstream coins, and the impact of capital withdrawal is also greater. The trend of capital leaving altcoins is becoming increasingly apparent, further exacerbating the possibility of price declines.
5. Shorting opportunities: Risk-reward ratio is more attractive.
Compared to going long, the risk-reward ratio for shorting altcoins has been higher recently:
The prices of most cryptocurrencies are already at high levels or near resistance points for rebounds, making long positions carry significant risks.
When the market lacks a clear bullish trend, going short can capture pullback waves, which aligns more with the current market reality.
By setting reasonable entry ranges, take-profit, and stop-loss levels, short trades can create higher returns for investors while controlling risks.
Capture the trend, follow the momentum.
Choosing to go short is not 'bias,' but a rational choice based on the market situation. When market sentiment cools, technical indicators weaken, fundamental support is lacking, and the macro environment is unfavorable, altcoins are more likely to become quality targets for shorting. Of course, this does not mean that altcoins have no opportunities for long positions, but in the current environment, a bearish strategy clearly aligns better with market trends.
The essence of trading is to follow the trend. The market is not an appendage of a certain emotion, but is driven by objective data and the environment. In this context, 'only short and not long' is simply my rational choice regarding the current trend, rather than a 'bias' against altcoins.
