Altcoin Shorting Strategies Evolve Amid Market Complexity

On April 7th, Smart Money, a prominent crypto KOL known as 0xsun.sol (@0xSunNFT), shared insights on the current state of the altcoin market. According to 0xsun.sol, the past two months have seen a strategic shift in shorting altcoins. Initially, the approach involved low leverage shorting, but this has evolved into a more diversified strategy with reduced single-position sizes. The rationale behind this change is multifaceted. Old coins have experienced significant value declines, while new coins, after undergoing a round of valuation adjustments, do not show clear market cap bubbles. This makes it challenging to sustain a continued decline due to the high rebound risk. Additionally, the increasing number of funds engaging in shorting and the actions of market makers, who are controlling the market to squeeze out short positions or using funding rates to counterattack, have weakened the advantages of shorting.

0xsun.sol believes that the golden age of shorting altcoins has come to an end, making it unsuitable for inexperienced players to participate. Regarding the strategy of buying the dip, the current macro changes, such as Trump's tariffs, have triggered further declines. However, the bottom of the market is not yet clear, and further observation is needed before making any decisive moves.

This analysis highlights the evolving dynamics of the altcoin market, where traditional shorting strategies may no longer be as effective. The increasing complexity and the actions of market makers are reshaping the landscape, making it crucial for investors to adapt their strategies accordingly. The current macroeconomic environment adds another layer of uncertainty, requiring a cautious approach to both shorting and buying the dip.