Classic tactics reappear: How did the demon currency TRB achieve bloodbath in the market?

No one expected that January 1 would usher in the first brutal "bloodbath" of 2024, and the market was wailing!

In this silent battle, the dealer still uses the classic tactic of pushing up the price to sell. Many users may not know the tricks behind it. Let me give you a detailed analysis.

1. TRB is a strong currency

First of all, we must clearly realize that TRB is a coin controlled by powerful market makers!

So how do you identify this kind of strong market maker coin? The best way is to use on-chain data, because market makers will not put a large number of coins on exchanges, so they must be on-chain.

On December 29, spot on chain sent a tweet saying that about 95% of TRB is in the hands of dealers. Here it is said that 20 whale addresses hold it, but we can think that the chips are highly concentrated.

Then guess what the total amount of TRB is compared to the 21 million BTC?

TRB Circulation

The answer is that the supply is only 1.95 million!

21 million BTC can be raised to $40,000, and TRB can be raised to $1,000. It is reasonable to say that this is not excessive. If $1,000 is not enough, then $500 should be okay!!! (On OKX last night, TRB has already risen to $700)

But it is not enough to just know that this is a strong coin. Why?

Because you don't know how the banker will operate, whether to pull up or crash the market, it all depends on the banker's thoughts, and it is difficult to follow

So we're going to use the next tool

2. Market sentiment

So how do you analyze market sentiment?

Here, the editor provides 3 indicators: ① Holding volume; ② LSUR; ③ Funding fee.

(1) Open interest

How to analyze holdings?

This is the trend of holdings before the sudden increase:

The price is rising, the open interest is rising, and the trend is very good, indicating that big funds are going long.

So here, how should we distinguish whether it is the banker or the retail investors who are long?

This requires combining with the second indicator - LSUR.

(2) LSUR

LSUR is a very practical indicator. LSUR > 1 means retail investors are long, and LSUR < 1 means retail investors are short.

The chart below shows that as TRB rose, LSUR also rose synchronously, which means that retail investors were following the trend.

So if you are the dealer of TRB at this time, what would you do?

Yes, there will be washing, and the extent of washing depends on your conscience!

Then the first classic scene of last night occurred, with a sharp drop of 30% in just a few minutes!

This wash is very brutal! A 30% drop corresponds to a 3x leverage, which means that even if you open 3x more in this wave, it will still not work!

Why is it 3 times?

Because a long time ago, the default leverage of OKCoin was 3x, and later everyone used 3x leverage for arbitrage, and they felt that 3x was very safe.

At this time, the banker has finished washing the market. How many positions were blown up this time? You can see how much the position volume has dropped. It is roughly correct. It is estimated that 30 million US dollars were blown up.

Then what happened after TRB fell sharply by 30%?

That’s right, all major media outlets are reporting that TRB plummeted 30%. For a time, it was all front-page headlines in various media outlets and was a hot topic of discussion!

What does this mean? It means that TRB has caught everyone’s attention. Before, many people may not have even looked at TRB, nor did they know what TRB is. After this promotion, many users knew about it, and then everyone started trading!

You know, the trader's attention is a very important aspect, because without popularity, it is impossible to sell even if the price goes up. When the popularity rises, the next operation can officially begin!

Here we still use the LSUR indicator, why? Because this indicator is really easy to use and can accurately judge the general direction of bankers and retail investors!

The market makers and retail investors are opposites. The more retail investors there are, the more the market makers can make a living. We can see how retail investors view the TRB coin.

After TRB plummeted, everyone thought it would rebound, so they must have gone long. After the drop last night, retail investors began to go long because the LSUR index showed a significant increase.

Our thinking and LSUR data support this judgment, so TRB is expected to rise.

What to do next?

At this time we need to use our main large order indicator!

$250 is a dividing point, because the large order data shows that after passing this position, the main force began to place a lot of buy orders below the current price.

Why do you do this?

In order to attract market-making robots or some high-frequency robots, robots relying on the OBI (orderbook imbalance) trading strategy helped him actively buy to push up prices. Continuously using large buy orders to push robots to buy at the market price and thus push the market price up was a classic operation method last night.

At 23:00 last night, what happened after the TRB price returned to its original point?

The price is flat, the open interest is falling, and the LSUR is falling. What does this mean?

This means that everyone thinks that TRB has reached its peak and starts to stop going long on TRB, so positions are closed and holdings begin to fall. Retail investors start shorting, causing LSUR to fall.

Last night, TRB went sideways for a long time after reaching 290. At this time, we would naturally think that it was the previous high! !

Therefore, a series of data show that retail investors are not optimistic about this position. If the price goes up, retail investors will still resolutely short.

At this time, the consciousness of the banker and the retail investors has changed significantly. The banker is bullish, while the retail investors are bearish.

The hunting time begins!!!

Moreover, it is late at night and it is New Year's Day, so everyone has to spend time with family, celebrate the New Year, and go to bed... This is why the explosion that started in the early morning ended in the morning, because it was aimed at our friends in the East 8 District!

This chart is very classic. The main large orders are buying frantically to support the price, and LSUR continues to fall.

Then why doesn’t the price fall?

Because the dealer feels that you are going to buy, the dealer will buy in advance, and then wait for you to raise the purchase price before selling it to you.

From 250 US dollars to 464 US dollars, an increase of 80%. Can you guess how much money the dealer used?

The answer is $40 million! Through a large order of $40 million, the price was pushed up from $250 to $464! When it was pulled up again, it was actually selling at the top. The main upward trend was from $250 to $464. During this stage, the dealer only used about $40 million.

The dealer controls the market by sucking, washing, pulling, releasing and killing. Now the pulling stage has ended and it has come to the delivery stage. In the delivery stage, what is the best delivery method? Pull up and deliver!!!

The editor simply drew a pattern. After the dealer finished the pull-up, he began his own delivery phase. After the sideways consolidation, there was a sudden pull-up, attracting technical analysts to buy, and then fell rapidly, hitting the stop loss. This wave really tested the psychological quality of technical analysts. This time the decline returned to around 464, which was actually a very clear delivery. At this time, the deep correction would attract retail investors to buy again, thereby continuously pushing up the price. However, because the dealer has been selling, the price moves slowly and cannot break through the previous high.

However, it should be noted that in many cases, the second top of the currency circle will also break through the previous high, hit the short stop loss, and then fall. So this time the rise, the dealer is kind-hearted, otherwise it will directly break through the previous high to hit the stop loss, and then plummet, leaving you with tears.

There is some kindness, but not much, because he caused a 70% drop!!! This drop is beyond the expectations of 99% of people!

Why can this be done? Because this is a coin controlled by funds, which cannot be explained by fundamentals or technical aspects.

So how do retail investors operate during the decline?

Let's go back to the analysis of LSUR and open interest. We retail investors like to buy at the bottom and hold orders. Then, during the decline, open interest increases and LSUR increases, which means that retail investors are taking on more.

Also, please note the highest price of $555. Isn’t it humorous? (It can be understood as a kind of market language. 555 means crying, that is, I am going to smash it, so go and cry. This situation also appeared on BTCUSDT perpetual on EuroEasy, at $44,444)

Starting here, we need to mention the exploding funding rate!

3. Funding Rate

Last night, Binance charged a funding fee every 4 hours, and the upper and lower limits of TRB funding fees were plus or minus 2%. The funding fee was -2%, and it was charged every 4 hours. This was very tempting.

Funding fee of -2% means that most people in the contract market are shorting TRB and selling TRB, causing the TRB price to be lower than the spot price.

If retail investors are all shorting, then the main players must be going long. LSUR also reflects this kind of data characteristics, so we verify a judgment point from multiple data sources.

However, generally, traders who do unilateral trading rarely care about funding fees. So which users care about funding fees?

Yes, it’s the arbitrage trader!

What arbitrage opportunities appeared last night? TRB funding is negative, so reverse arbitrage can be opened, but reverse arbitrage requires coins, but the dealer usually borrows all the coins in advance to prevent someone from interfering with his operation with chips, so reverse arbitrage generally does not work, so arbitrageurs generally use double contract arbitrage.

Applied to TRB here, it means: Binance TRB USDT contract is long, OKX TRB USDT contract is short.

Why do we do this? To collect the funding fee that is settled every 4 hours:

Binance funding fee is -2% (settled every 4 hours) = -8%

OKX funding fee is -1.5% (settled every 8 hours) = -1.5%

Then let's calculate how much profit there is. The profit in 8 hours is 6.5%. And because it is arbitrage, there are both long and short positions, so it should be relatively safe. So most arbitrageurs saw this trading opportunity last night and ran to do arbitrage.

However, arbitrage is also risky, especially cross-exchange arbitrage. The core risk is that the exchange will close the withdrawal, and then the price difference between the two sides will be out of control. Another risk is that the currency will be pulled too hard and one side will explode, which will be a one-sided loss. If you close the position quickly after the explosion, the loss will not be particularly large, but if you keep one side after the explosion, it will cause a one-sided risk.

Then we saw the price of OKX at more than 700 US dollars. Because OKX has a shallow depth and arbitrageurs opened short orders on OKX, there was a series of short position liquidations, which finally caused the OKX price to be much higher than the Binance price. The OKX contract price of more than 700 US dollars was caused by the arbitrageurs' series of liquidations.

Of course, there is also a kind of arbitrage that takes advantage of price differences, which can also be very profitable if done well.

Arbitrage is an important player in the market, but improper risk management will lead to big problems. Last night's TRB was a nightmare for arbitrageurs, and many people were liquidated. Therefore, you must pay attention to risk control when trading, set stop loss firmly, and don't let small losses turn into big disasters. At the same time, if you can combine the main force's large orders with the dealer's trading last night, the harvest will be very rich.

Now TRB has completed the process of releasing goods and killing prices. Because there are so many users whose positions have been liquidated in this wave, it is expected that there will be no new market in the short term. Even if there is a new market, it will need to go through another wave of accumulation and washing.

Summarize

The review of this round of TRB bloodbath is basically over. To sum up, if we want to make money in this wave, we need to make full use of the following tools and methods:

1. Discover strong coins

2. Found abnormal funding fees, LSUR, and holdings

3. Analyze the main funds in combination with the main large orders (or large transactions)

4. Set a strict stop loss

Combining the main large orders is the best choice to grasp the market maker's financial control. Whether buying or selling, it will eventually be reflected on the market. As long as there are orders and transactions, we can monitor it, so everyone must make good use of these tools!