🚨 Yesterday, many people, like me, failed to hedge with $MMT and got wiped out. There's no way around it; it's rare to encounter a contract that can surge 20 times in one night!

I happened to come across this article, and the analysis is quite brilliant. Although the speculation may not be entirely accurate, this textbook-level market-making strategy is worth breaking down!

Overall, the core of this operation is—first create a consensus for shorting, then turn around and harvest the short liquidity.

From a structural perspective, it can be broken down into three stages:

1⃣ Pre-market Game: Market Makers Set Traps

After a high opening for MMT on Bybit, it fell all the way down. This step is actually a signal induction:

The purpose of this trend is to create a conditioned reflex in the market that "the new coin is about to break."

Especially with the recent sluggish market, the overall new coin market is mediocre, making it easier for market sentiment to turn bearish; this behavioral logic will be reinforced.

2⃣ Opening Tactics: Low Opening Lock-in, OI Stacking, Centralized Control

At the official opening, they chose a low opening at 0.35, which is a critical point: it is below the average cost for retail investors and above the market makers' entry cost, and with the airdrop unlocking in three days, it creates a dual pressure of time and psychology.

At this point, the retail investors' cost for new coins is breached, and large investors start considering hedging, with market sentiment completely leaning towards shorting.

At this time, market makers are preparing for the subsequent reverse hunting; they can—

Buy spot at low prices;

Simultaneously establish hedges on the contract side;

Ultimately forming a "long spot + short contract" neutral position.

In just half an hour after the opening, OI on Bybit and Binance stacked to 100M, indicating that funds are highly concentrated, and the main capital is rapidly building positions, creating a scarcity of chips.

If half of this is the market makers' own hedge positions, it means they control most of the circulating supply with less than ten million dollars in costs.

🎯 The state of the market makers at this moment:

They have spot, short positions, and control over liquidity. Once they decide to pump, they become the "creators" of the market.

3⃣ Precise Timing, Liquidation: Costless Pump

When the number of coins held by market makers exceeds the circulating supply, they effectively hold "101% of the coins." This state means they can pump at any time:

Every time the price rises a bit, a batch of short positions gets liquidated;

Each time, it pushes the price to continue rising;

No need for additional buying, just using the counterpart's margin to push the price, relying on market mechanisms for self-appreciation.

At the same time, they choose to start the pump after 4 AM, when the rates have just refreshed, making the cost of new short positions higher, while the Asian market is asleep, slow to react, and the market depth is thin.

Additionally, OI has not significantly decreased even after the price doubled, indicating that a large number of short positions are fully leveraged rather than isolated. This means:

Every cut made by market makers during the pump directly penetrates the short margin;

In a fully leveraged mode, it leads to other positions being liquidated together;

The result is more funds being fed back to the market makers.

This is the so-called "costless pump" logic. Simply put, market makers are almost invincible in this game:

They don't spend money to pump; instead, they recover profits during the pump.

Retail investors hedge, they profit;

Shorts get liquidated, they profit;

Market fluctuations, they earn fees;

They don't even need direction, just the volatility itself.

Therefore, the approach taken with MMT may not just be about crashing or pumping; in the end, the market sees a price surge, but in reality, every step is not improvised; it can all be designed.

If you still want to play the market, how can you compete?

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