$PUMP Profit Review of 70k USD (Simply put, it's brain-burning, proceed with caution)
Many people's reviews are meaningless:
When many people review their own trades, the general idea is that there were many short sellers at the time, I went long, added during the pullback, then it went up, and I made money.
The meaning of a review is to validate and correct your trading expectations and basis, not to find a reason to prove you were right.
It’s not about self-pity, saying things like 'I sold at the peak' and regretting it.
In previous articles, I mentioned my trading expectations for $PUMP. By the time $PUMP opened, I already had a profit of over 50k. I experienced a pullback along the way, and what were the points and judgments I corrected?
Why was I so confident in going long before the market opened?
Before the market opened, the contract holdings were already 50% of the market value. This is extremely rare for a token that hasn't yet undergone TGE, and with such a huge FDV anchored to the pre-sale cost.
With such a massive amount of capital, one can only assume that only the whales could establish so many contracts. The effectiveness of such a large capital base could serve as an expected anchor.
Moreover, only $hype has shown such huge volatility and a large order book activity. As shown in Figure 1.
Why did this happen? My personal judgment is that many hedging orders have accumulated, and thus the order book is not being consumed, trying to break the cost to test the insurance mechanism of $HLP.
After the large spike, the order book's depth at the same precision showed a significant shrinkage.
From on-chain analysis of public offerings, it appears that retail investors are entering less, and institutional operations can also drive related events.
In summary, I locked in the cost of establishment between 50-70, and there is momentum to produce a breach of 3x hedging behavior.
The second judgment for the continued rise is based on the pool depth, which is 10M. If it transitions to perpetual contracts before opening, and $hype takes the index price, then the 10M depth can determine the survival of 600M contract OI. Even if the OI mechanism of $hype is halved, there is still a certain amount of short space available.
Therefore, my judgment is to continue holding and wait for a rise.
At the market opening, it hit 0.0068. Why did I only close part of my position? What is the basis for my judgment of the airdrop lifeline?
Within the first minute of opening, the order book accumulated a large number of short positions, leading to a price drop before transitioning to perpetual contracts.
This group of people might be cautious hedgers who, after confirming that the spot price has a certain profit over the pre-sale price, directly carry out hedging operations to avoid being caught in a liquidation.
This group formed a short-term airdrop lifeline, using it as the basis for trading. As shown in Figure 2.
If I were the whale, I would trigger the short lifeline to push prices up and then sell at a high to the fools.
However, this deviated from my expectations. When it touched the short lifeline, the rise stopped, and at 0.0068, I performed a certain degree of closing to secure my 15k profit.
I am very tired and cannot continue watching the market to see if it rises again to challenge the lifeline; I can only set a stop-loss and sleep.
A better operation would have been to close more positions and wait to re-enter, but unfortunately, it was too late.
My stop-loss is at 0.005, which is also the price point I initially judged for increasing my position.
What is the positive fee rate on Binance?
This is a question that Wei Tuo asked me, @thecryptoskanda, because I haven't seen a contract with a positive fee rate for a long time. Is it because there are too many long positions?
I personally judge that the transition to perpetual contracts before opening takes about 30 minutes. During this time, hedging airdrops sell the spot and exit their short positions.
The fee rate is based on the relationship between the price of short positions and the index price. After closing short positions, the long positions become effectively higher, leading to a positive fee rate, which doesn't last long before it drops again.
It can be confirmed that it is balanced.
At this time, the basis for my continued holding is:
1. The cost of the whale's establishment
2. The expectation of transitioning from perpetual contracts to spot.
3. The high level of contract OI and the profitability of triggering shorts.
4. $trump whale buying a lot.
Several key points remain stable above 0.0055.
The project party's buyback event prompted me to close most of my position.
Today, $Pump announced a buyback using transaction fees, and several points mentioned in the previous article are still remembered by everyone.
If the last amount mentioned was indeed from the project party, then the buyback can be executed through a wash trading method, performing a cost-free operation of left hand selling to the right.
And based on the previous challenge of HLP’s huge short positions being opened by the project party themselves, another rise would mean they are dumping their own arbitrage positions.
Gradually closing their own arbitrage positions, stabilizing the price, and selling steadily is what matters.
I can stabilize at prices between 0.05-0.07 and clear my position under the current liquidity.
In summary, I will cancel the short-term pumping plan and complete the withdrawal.
If I can negotiate with subsequent exchanges to list on a larger exchange, I can close the airdrop positions and sell the high spot prices to the fools.
Keeping a little for being listed on a bigger exchange is also wise, as my establishment cost is very low, at 0.0048.
In simple terms, that’s what I mean; the thoughts along the way are quite complex.
If you ask me how much I look at, I say, 'Look at what?' It's about dynamic thinking and dynamic correction; that's what trading is.
The whole network is long on $PUMP, but I really haven't seen many.
The rest is up to the atmosphere group.
