DYDX Token Unlocks: Why Market Manipulation Makes Shorting Risky

COINOTAG news reported on September 24 that prominent crypto KOL Sisyphus highlighted significant challenges associated with shorting large-scale, public token unlocks. Sisyphus pointed out that teams can choose to re-lock tokens unexpectedly, as previously observed with dydx. This unpredictability makes shorting inadvisable. Although long-term price declines are likely, short-term price manipulation remains a prevalent risk due to its legality within the cryptocurrency market. Consequently, Sisyphus cautioned against using public token unlocks as a reliable shorting opportunity, citing the ease of market manipulation.

Top trader Eugene Ng Ah Sio responded by endorsing this viewpoint, advising traders to avoid shorting during token unlocks. He emphasized that while shorting poses substantial risks, there are several viable strategies for those who are long on unlocks. Thus, Ng Ah Sio’s insight underscores the importance of understanding the inherent market dynamics and manipulation potential when engaging in cryptocurrency trading.