CEX New Coin Liquidation Exceeds $65 Million, Is the "Bear Market" Also Coming to an End?

Today's best joke is "Auntie transferred money to OKX, only to find out that there is no coin called PI, then saw IP as the top gainer on the list, angrily scolding the exchange for being too careless, mixing up the letters, and promptly jumped on the bandwagon."

As you can see, waking up from a nap, the top gainers are all new coins, as of the time of writing:

IP is up 47% in the last 24 hours, reaching a high of $8.9

KAITO is up 51% in the past 24 hours, reaching a high of $2.1

BERA is up 30% in the last 24 hours, reaching a high of $9.6

Market data shows that the IP contract price on the OKX platform briefly touched $9 early this morning, with a spot price reaching $8.96, up about 550% from the low point on February 16. Coinglass data shows that the total liquidation of IP contract trading across the network in 24 hours amounted to $40.69 million, second only to BTC contract trading ($50.44 million), with long liquidation at $10.38 million and short liquidation at $30.31 million.

Meanwhile, KAOTO's trading volume exceeded $2.5 billion, with a network-wide contract liquidation of $24.53 million, ranking third across the network in 24 hours, behind only BTC and IP, with long liquidation at $10.31 million and short liquidation at $14.22 million.

Why the Skyrocketing Liquidation?

Many investors exclaimed that this kind of market behavior is not typical, but more like the exquisite manipulation of institutions, market makers, or operators who believe that the cost of rapid price hikes is much lower than liquidating retail positions.

In the past, when the price of tokens surged, there would be profound analyses, but today's situation has little to do with fundamentals and price.

Recently, the token burn by PENGU and the buyback of JUP did not cause much of a stir at the price level. Since "if you don't like it, you can short it" has become the consensus, the so-called "fundamentals" of new coins are hardly noticed. As soon as the contract is launched, the market is flooded with scenes of negative funding rates going to the max and bears swarming in. The era of profound analysis is long gone, and market trading behavior is now dominated by funds and leverage contracts.

And when the mindset of retail traders becomes fixed, the next step is harvesting. The clues are evident from the liquidation data of IP: when everyone is on the "short" side, as long as institutions invest relatively limited funds to raise the coin price, they can "catch" retail liquidation positions and profit from "contract liquidation."

The community jokingly refers to "there are no retail investors who wake up at 4 am and use $100 million to push the IP to $9, this is done by main force." For the main force, increasing the coin's price sharply in the short term to profit from the liquidation of short positions is often faster and more direct than slowly "funding" in the secondary market. Once those short-selling retail investors are harvested in reverse, the main force can lock in profits at a high level. In this way, funds continue to tilt toward the main force, making the subsequent coin price easier to manipulate.

The reason why a new coin can play like this lies fundamentally in its liquidity and circulation not being as abundant as mainstream coins, allowing a slight intervention of large funds to manipulate the market. If the heat is sufficient in the short term, the main force is still willing to continue to test the retail investors' loss tolerance.

Although many people like to summarize the market with "it won't rise in the direction of the crowd," in the ecosystem of new coin contracts with high leverage and high volatility, this rule is often exponentially amplified by market reflexivity. To put it simply: as long as the shorts become mainstream, the main force often chooses to wipe them out in one go. However, there is not a single way to harvest the crops. Market leaders can both boost and significantly suppress the market when retail investors turn to "buying the dip". So, simple "mindless chasing after short positions" or "mindless longing" can both be harvested.

In each round of the new coin myth, many people may harbor a lucky mentality, thinking that they are quick enough to cut in before me. However, most of the harvested crops originally thought that they could take profits when they saw positive signs, but the outcome is often a much faster liquidation trigger than imagined.

In this market where retail investors and main forces vie with each other, and everyone wants to short, the main force that nurtures market thinking habits is best at harvesting in chaos, while reflexivity and capital leverage are a double-edged sword in their hands. To stay clear-headed, perhaps the only thing to rely on is awe of risk and understanding of market mechanisms. After all, the person who laughs last must have seen the logic and operational methods behind the story, rather than blindly following the excitement. Whether the next price continues to skyrocket or plunge, rational prudence is the best strategy.