Short sellers cut losses, Meme coin teams are offloading—has the market hit bottom?
Today, looking at three events together is quite interesting.
Hyperliquid's largest BTC short finally couldn't hold on and cut losses early this morning. 1,000 BTC, liquidated in four batches, with a loss of $2.345 million.
Opening price was 69,614, liquidation price ranged from 70,802 to 71,936.
This is equivalent to losing money by shorting in a bull market.
Interestingly, he ran away but still holds $20 million in long positions on crude oil, with an unrealized loss of $98,000. After losing in the crypto market, he switched to crude oil trading, which is a bit puzzling.
Top analyst Willy Woo tweeted today, explaining why the altcoin market as a whole cannot rally:
The core reason is the aftereffects of FTX liquidation.
After FTX's bankruptcy, a large amount of locked SOL was sold off at a 60% discount, and hedge funds immediately shorted in the futures market for hedging, combining staking yields + basis gains, earning 70-80% over more than a year.
After this strategy spread, project teams and foundations sold locked tokens to hedge funds in advance, and hedge funds continuously released selling pressure in the derivatives market.
The coins bought by retail investors have long been shorted by institutions. Profits were eaten in advance, and selling pressure was digested early.
But the good news is: the actual unlocking selling pressure this round may not be as scary as it seems on the surface.
Trump Meme coin team is offloading
6.97 million TRUMP ($2.318 million) has just been transferred to BitGo custody.
This operating model means: they could dump at any time.
Overall judgment
These three events tell us the same thing: the market currently lacks selling pressure, but what it lacks is confidence.
Short sellers cutting losses indicates that a short-term bottom zone may be gradually forming, but the Meme coin team's offloading and the lingering cash-and-futures arbitrage from FTX are still suppressing the market.
In this market, rather than chasing highs and cutting losses, it’s better to wait until the direction is clear.
When will the market improve? It will naturally get better when all the shorts are wiped out and the selling pressure is fully digested.
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