2026-01-12 08:26:14

A recent question has been asked very frequently: should I go long or short in this current market condition? I'll give a direct conclusion and then analyze it in detail.

In low-liquidity meme coins that have already dropped 50%, shorting now is actually a very high-risk decision. It may sound counterintuitive, but the risk and reward balance is indeed unbalanced. This doesn't mean you can't short at all, but choosing to short at this point is most likely to fall into the trap of "being too smart and outsmarted oneself."

**Why is it more dangerous after a 50% drop?**

First, understand that in small-cap coins, a -50% decline is not considered extreme. Many meme coins can rebound 20-60% after being halved, which is a short squeeze. Then another round of dumping follows. The key is not the direction judgment but the volatility intensity.

What’s even more concerning is the liquidity issue. Look at this coin's data: market cap is about $47 million to $49 million, with liquidity only around $1.9 million to $2 million. What does this mean? Raising the price by 10-20% costs very little. If you want to short, your position can be wiped out instantly when the price surges. Especially when shorts are crowded, and everyone expects further decline, this is exactly the hunter's favorite moment for the main players.

A typical pattern is: 50% crash → market consensus is bearish → retail investors start shorting in unison → main players reverse and buy in, pushing the price up 20-40% → retail investors get liquidated → either distribute or the price drops again. This is called a short trap, and it’s especially common at this stage.

When is it relatively safer to short? When a rebound fails, the price consolidates at high levels but liquidity is declining, positive news has been digested, and the market begins to relax. Never choose moments when the price drops 20% in an hour, or has fallen 50% overall, and the market sentiment is already collapsing.

The final advice is simple: decide whether to participate based on your risk tolerance and current mindset.

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MEVHunter_9000

· 13h ago

It's the same old trick again. When the bears pile up, I want to buy the dip and short... but I get hammered in the opposite direction. Did I dodge it this time? This liquidity data is really sharp. The cost to pump the market is less than two million, and retail stop-loss orders are as fragile as paper. No more words. I'll wait for the rebound to fail before acting. It's always the same play—short traps one after another. I feel like I've gained some insight, but actually I haven't... I really should listen to this analysis.

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Fren_Not_Food

· 13h ago

Another classic bear trap trick, retail investors keep falling for it every time It’s painful just to watch... with such poor liquidity, daring to short, serves them right for getting wiped out The main players love to see us all blindly follow and short, so typical This wave really shouldn’t be touched, wait until the market recovers before considering Making decisions when your mentality is shattered, 100% regret Consider it after a rebound fails, now really isn’t the time This crazy coin game, making money depends on luck, losing money depends on skill, I choose to lie down

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governance_ghost