Guys, I've shorted, this time I've shorted $AAVE $SOL $APE
Firstly, during the Federal Reserve's interest rate hike cycle, risk assets (especially highly volatile altcoins) are prone to sell-offs.
Tightening dollar liquidity leads to an overall outflow of funds from the cryptocurrency market. Additionally, the rise in Bitcoin's dominance has caused funds to flow back from altcoins into $BTC, triggering expectations of the 'altcoin season ending'.
However, AAVE, SOL, and APE are all showing bearish patterns such as divergence at the top and descending triangles on daily/weekly charts.
The funding rate for perpetual contracts continues to be positive, and over-leveraged long positions need to be liquidated, exacerbating the downturn.
I. The logic behind shorting AAVE
DeFi market shrinks: If the overall DeFi TVL (Total Value Locked) decreases, lending demand diminishes, directly affecting AAVE protocol revenue, which may lead to selling pressure on tokens.
Intensifying competition: Competing products like Compound and MakerDAO are optimizing interest rate models or launching incentive measures, diverting AAVE users.
Regulatory pressure: If regulatory agencies impose strict policies on lending protocols (such as KYC and interest taxes), it may suppress AAVE's growth.
Technical signals: If the price breaks below key support levels (such as historical lows or liquidity-rich zones), it may trigger algorithmic sell-offs. On-chain data shows large transfers to exchanges, indicating selling risk.
II. The logic behind shorting SOL
Loss of top projects: If top projects on Solana (like StepN and Raydium) migrate to other chains, the ecological value will diminish.
NFT market cools down: The trading volume of NFTs on the SOL chain has declined (as reflected in Magic Eden data), indicating a decrease in user activity.
III. The logic behind shorting APE
BAYC popularity declines: If the floor price of blue-chip NFTs continues to drop or trading volume shrinks, the demand for APE as an ecosystem token will sharply decrease.
The rise of alternative entertainment: New sectors like GameFi and SocialFi are diverting user attention, ending the NFT speculation cycle.
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