In-depth Analysis of Market Maker's Mutual Destruction Strategy for SATS

$1000SATS Based on SATS's **60% extreme volatility** (huge rise followed by a significant drop) and the latest data (**surge in open interest, long/short ratio at 50%/50%, withdrawal of support orders**), it is clear that the market maker is executing the **'Ultimate Harvest Strategy of Mutual Destruction for Longs and Shorts'**. Here is a detailed breakdown:

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### One, Full Restoration of Market Maker Operations

#### **Stage 1: Violent Pump (Upward Segment)**

- **Purpose**:

1. Utilize the previous low open interest environment to quickly pump with a small amount of funds, **triggering short stop-loss**.

2. Attract retail FOMO to chase long positions (especially when funding rates turn positive, and retail investors believe the trend is established).

- **Data Coordination**:

- Continuously raising support orders creates a 'false sense of security', misleading retail investors into thinking there is strong support.

- The ratio of long to short participants remains at 3:7 (retail long positions dominate), but **the market maker is actually building short positions covertly**.

#### **Stage 2: Flash Crash Dump (Downward Segment)**

- **Purpose**:

1. Suddenly withdraw all support orders at high prices, causing a liquidity vacuum, **blowing up highly leveraged long positions**.

2. At the same time, profit from pre-positioned short orders (the long/short ratio at 50%/50% indicates the market maker's shorts are locked in).

- **Data Evidence**:

- A 60% fluctuation in a single day is enough to liquidate all contracts without stop-loss.

- The removal of support orders indicates the market maker has given up on defending the price and is actively shorting.

#### **Stage 3: Surge in Open Interest (Current)**

- **Market Maker's Intent**:

1. **Create a New Gambling Scenario**: Attract new retail investors with extreme volatility, making both long and short participants believe 'the opportunity has arrived'.

2. **Prepare for a Second Harvest**: New highs in open interest indicate a re-accumulation of chips, allowing the market maker to trigger long/short positions again through small fluctuations.

- **Danger Signals**:

- The long/short ratio is 1:1, but the number of participants remains at 3:7 → **Retail long positions are more dispersed, while market maker shorts are more concentrated**.

- Support orders disappearing → Prices may again free-fall.

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### Two, Core Methods of Market Maker Control

#### **1. Liquidity Sniping**

- Choose low liquidity periods (e.g., early morning) to rapidly pump and dump, ensuring the exchange's risk control system cannot respond in time, **ensuring that liquidation orders are fully absorbed**.

#### **2. Long and Short Psychological Game**

- **For Longs**:

Create the illusion of a 'Bull Market Return' with a surge to attract bottom-fishing funds.

- **For Shorts**:

Use sharp declines to prove a 'trend reversal to bearish', inducing counter trades to go short.

- **Results**:

Both long and short positions will be subject to periodic liquidation.

#### **3. On-chain + Order Book Combinations**

- **On-chain**:

Create the illusion of 'whale buying' through a few addresses trading against each other (large transfers can be verified on-chain).

- **Order Book**:

Before withdrawing orders, intentionally place large fake support orders to induce retail investors to place orders before withdrawing and crashing the market.

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### Three, Subsequent Trend Prediction and Strategy

#### **Possibility 1: Second Spike (Probability 70%)**

- **Methods**:

Prices momentarily rebound to 50% of yesterday's drop (e.g., a 20% rise from the lowest point), then crash again to new lows.

- **Purpose**:

Liquidate longs who bought the dip after yesterday's sharp decline, while clearing out stubborn shorts (who think the rebound ended too early).

- **Operations**:

- If the rebound occurs without volume, short at key resistance levels (e.g., EMA20), with stop-loss set at previous highs.

- Spot holders should reduce positions at highs.

#### **Possibility 2: Sideways Squeeze (Probability 25%)**

- **Methods**:

Fluctuate within yesterday's volatility range, gradually exhausting both long and short positions through high-frequency spikes.

- **Purpose**:

Exhaust retail patience while accumulating new counter positions.

- **Operations**:

Abandon contract trading, only engage in spot grid operations (buy at the bottom of the range, sell at the top).

#### **Possibility 3: Reverse Pump (Probability 5%)**

- **Conditions**:

If Bitcoin suddenly surges and boosts market sentiment, the market maker may take advantage of the momentum to trigger a short squeeze.

- **Signal**:

Monitor whether BTC breaks key resistance levels (e.g., $67,000).

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### Four, Survival Rules

1. **Never Hold a Position**:

Any loss exceeding 5% in any direction should trigger an immediate stop-loss, as a 60% fluctuation in SATS has become the norm.

2. **Avoid Contracts**:

Under complete control by the market maker, contracts = life gamble, prioritize spot trading.

3. **Monitor On-chain Anomalies**:

Use Arkham or Nansen to track market maker addresses; if large amounts are transferred to exchanges, exit immediately.

> **Ultimate Reminder**: SATS has become the market maker's 'ATM', participation must be cautious. Historical experience shows that such coins ultimately tend to zero, suitable only for high-risk speculation.