Crypto markets are a bit like a rollercoaster operated by a teenager. Wild drops? Oh, they happen. And knowing how to short sell on crypto might be your answer when those dips come rolling in. 

This guide will walk you through the basics: how to short sell crypto, what to watch out for, and some classic examples to make it all sink in.

Short selling is a strategy to make some profits in the bearish crypto market.

Picture this: you’re absolutely certain that Bitcoin’s price is about to fall. That’s the spirit of short selling crypto — it’s betting against an asset, with hopes that the price will tank, so you can make a profit.

In traditional markets, short selling typically involves borrowing an asset, selling it at a high price, and then buying it back at a lower price to pocket the difference. But, as explained in this article on short selling in stocks and this one for Forex, there’s an easier way to short without actually owning the asset — using CFDs (Contracts for Difference). The same method applies to short selling crypto, where you can simply bet on the price drop without needing to handle the asset directly.

There’s nothing wrong with hodling (“Hold on for Dear Life” strategy popular among crypto traders), but short selling lets you play both sides of the market. 

While the classic strategy is to buy and hold, there’s a huge advantage in having a way to profit when the market takes a dip. 

• Hedge Against Losses: If you’re holding a bunch of Bitcoin but worried about a crash, you can use short selling to offset potential losses.
• Profit During Downturns: Everyone else is panicking and selling off their crypto — meanwhile, you’re profiting from the market’s woes.
• Fast-Moving Opportunities: Crypto markets move fast, and short selling lets you take advantage of quick downturns without having to cash out your long-term holdings.

Let’s get into the nuts and bolts of how to short sell crypto.

1. Pick a cryptocurrency that you think is going to decrease in price soon.

2. Analyze the chart with your favorite indicators for crypto.

3. Choose the amount you’d like to invest in this trade (in pips). Don’t forget to set the Stop-Loss!

4. Open a trade at the current price.

5. Close the deal if your prediction was correct, and the asset price went down.

And voila, you’re a short seller. Just don’t get too attached to the “betting against” mindset; it’s a tool, not a lifestyle.

1. Follow the hype

Crypto doesn’t follow regular market patterns; prices are often driven by hype, news, and FOMO (fear of missing out). A sudden Tweet or news item can turn the market on its head, so make sure to subscribe to some crypto news portals and follow the headlines in our Newsfeed.

2. Use the right indicators to spot bearish conditions

Use these indicators as your reliable GPS signals in a land of random crypto price swings. 

Moving Averages — Spotting Trend

The grandparent of all indicators, a Moving Average (MA) smooths out all the daily price wiggles, letting you see the bigger trend. 

• If your MA is trending upwards, the asset is likely in an uptrend. 
• If it’s pointing downwards, it’s time to short sell. 

This indicator helps you cut through the noise and spot the overall direction of a crypto’s price.

MACD — Trend Reversals

The MACD helps you spot shifts in momentum and trend changes. 

MACD uses two moving averages and a “signal line” to give you clear buy or sell signals. When these lines cross, it’s time to pay attention because it might be a good moment to make a move:

• A downtrend is expected when the fast (blue) line turns up and crosses below the slow (red) line.
• An uptrend is expected when the fast (blue) line turns up and crosses above the slow (red) line.

RSI — Reality Check

If you’re new to crypto trading, RSI is as simple as it gets, yet it tells you when a price is probably a bit out of line with reality. It’s all about helping you identify when the price might have stretched too far in one direction.

• An RSI score of 70 or above? The asset might be overbought, and the trend might reverse to bearish soon.
• Under 30? It might be oversold, returning the trend to the bullish phase.

The good thing about RSI is that it can give you both entry and exit signals, helping you cap your profits before the trend goes up again.

Let’s see how it works in action. 

In the example below, we opened a trade on Dogecoin-PerpFuture asset. 

Here’s a breakdown of the action:

1. Trend Check: Doge was climbing steadily — a strong uptrend was detected.
2. MACD Analysis: We saw a trend reversal signal from MACD as the blue line crossed the red from below, signaling a potential shift.
3. Entry: We set our test investment (2000 pips), configured risk management, and hit “Lower,” anticipating a bearish turn.
4. Exit: As the market began to flatten, we closed the trade with a profit.

Short selling is risky, and in the volatile world of crypto, that risk is amplified. Here are some things to keep in mind:

1. Leverage is a Double-Edged Sword: Many platforms offer leverage, which can multiply your gains, but it can also magnify losses. Crypto prices are volatile, and one wrong move with leverage could cost you.
2. Market Mania: Crypto doesn’t follow regular market patterns; prices are often driven by hype, influencers’ moves, etc. You need to develop a very specific crypto trader’s brain to feel comfortable trading digital assets.
3. Fees and Interest: Shorting crypto can come with interest rates or fees, especially if you’re using a CFD or margin trading. Make sure you know what those costs are before diving in.

Final thoughts

Short selling crypto can be a smart way to navigate the crazy ups and downs of this market. Just remember to treat it like any powerful tool — with caution. Start small, keep an eye on the trends, use relevant indicators, and always use stop-loss orders. 

After a tumultuous week, the Bitcoin price is starting to find its footing again, rising from major support around the $115,000 level. Currently, the pioneer cryptocurrency looks to be on the path of recovery and possibly moving toward new highs this week as momentum picks up. There is also the possibility of a coming short squeeze, as explained by crypto analyst Luca on X, using recent developments that show that the recent crash may have only been temporary.

Bitcoin Shows Tendency To Cross $123,000 Again

In an X post, Luca pointed to the Bitcoin market makers as the ones behind the recent price movements and that there was a reason for this. The initial move downward looked to be an attempt to flush out late longs as crypto traders tried to take advantage of the frenzy created by the new all-time highs.

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Then a reversal moved into the works, catching shorters unaware and sweeping liquidity at support levels. This comes as bears were pulled into a false sense of security, believing that the price would continue to decline before being hit with the move back up above $118,000, triggering hundreds of millions of dollars in liquidations.

All of this is happening at a time when things like the Bitcoin funding rate were falling. Coinglass data shows the Bitcoin OI-Weighted Funding Rate had fallen briefly below 0.01% on Sunday after reaching as high as 0.0167% earlier in the week on July 23. Luca further revealed that the Bitcoin Premium metric had also fallen back into the negative.

Another interesting fact was the fact that the open interest had shot up when the Bitcoin price had declined. Then, once the price began to recover, the open interest began to rise once again, and Luca interprets this as short positions starting to get squeezed. If this squeeze continues, then the Bitcoin price could spike very quickly, taking out tens of thousands of short positions with it.

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BTC Open Interest Tells A Story Of Exposure

As the Bitcoin price has bounced between $115,000 and $120,000, the BTC open interest has barreled upwards in response. In fact, this metric sits at all-time high levels, shaking off the market uncertainty as crypto traders continue to open positions to bet on Bitcoin’s next move.

The open interest had touched $87.89 billion back on July 15, and since then, it has averaged above $80 billion every day. Amid this, the Binance Long/Short ratio shows that shorters are currently dominating at 53.97% compared to 46.03% for long accounts. This lends credence to Luca’s expectations that the market could see a short squeeze to take out shorters and push the price to new all-time highs.

Featured image from Dall.E, chart from TradingView.com

A closely followed crypto strategist believes that the Bitcoin (BTC) bull market will endure another year or so based on historical precedent.

Pseudonymous analyst TechDev tells his 537,900 followers on the social media platform X that he thinks Bitcoin follows the business cycle, or the ebb and flow of macroeconomic activity, rather than the four-year halving cycle.

According to the analyst, Bitcoin tends to rally hard when the business cycle begins a new uptrend, while the copper-to-gold ratio – a risk-appetite indicator –bottoms out.

Taken together, TechDev says the signal marks an “inflection point” that has historically aligned with the timing of Bitcoin bull market tops.

“There is a Bitcoin cycle – just not what many think.

It mirrors the business cycle.

Bitcoin tops when it tops.

Bitcoin goes parabolic when it inflects.

Bitcoin’s ‘ramp’ length = time until inflection

Bitcoin has always topped 14 months after inflection.” 

As for his Bitcoin price targets, TechDev sees BTC hitting $170,000 in the short to mid term and about $380,000 in the long term. His predictions are based on BTC’s two-day and two-week charts, which show that Bitcoin broke out from massive cup-and-handle patterns on both time frames.

The cup-and-handle pattern suggests that a bullish asset will continue its uptrend after a period of consolidation.

“We literally just did this.” 

At time of writing, Bitcoin is worth $118,110.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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Ethereum blasted past $3.6K for the first time since January.

And as the Kobeissi Letter pointed out, it’s right in the middle of one of the biggest short squeezes crypto has ever seen.

Here’s what happened:

At the start of July, tons of traders were shorting ETH.

(Quick explainer: shorting = betting the price will drop. You borrow ETH, sell it now, and hope to buy it back cheaper later so you can keep the difference. But if the price goes up instead, you lose money.)

But at the same time, big dawgs like Ethereum treasury companies and ETFs were steadily buying ETH.

Matter of fact, ETFs just had their best two days ever – $1.32B in inflows.

Now, here’s the problem for the shorts: because demand was steadily building, ETH started increasing. And since they were betting against it, they started losing money.

On top of that, many of those shorts were using leverage (basically borrowing even more money to make their bets bigger), so their losses added up even faster.

Eventually, the losses got so big that exchanges automatically closed their positions – something called liquidation.

To close out, these traders had to buy ETH to pay back what they borrowed.

But here’s the thing: when a bunch of short sellers are forced to buy at the same time, it pushes the price even higher.

And that higher price forces even more shorts to close, which increases the price more.

That’s the vicious cycle known as a short squeeze– and we’re seeing it play out in full force right now.

This cycle has already pumped ETH 40%+ this month and added over $130B to its market cap.

Billions in shorts have already been liquidated, and if ETH climbs another ~10%, another billion dollars in short positions could be wiped out.

If this keeps up, $4K ETH isn’t far off, Kobeissi says.

And ETH isn’t the only altcoin having a moment.

XRP set a new all-time high above $3.60 today, and its market cap topped $200B for the first time ever.

All this altcoin action pushed the entire crypto market past the $4T level – another all-time record.

But why are the vibes soo good?

To be continued…

Hedge funds have been aggressively shorting ether (ETH) during the recent uptick to $3,000 as they attempt to harvest a yield by carrying out a basis trade.

Hedge funds are shorting ether to the tune of $1.73 billion on the CME, a venue favored by institutional traders, according to data from the Block, which cites the CFTC. CME data also shows that ether leveraged net totals have skewed heavily to the short side, according to X account zerohedge.

A basis trade involves shorting an asset on one venue whilst simultaneously buying on another, remaining delta neutral in terms of price action. In this case, traders can secure around 9.5% per year by shorting ETH on the CME while buying spot ETFs, of which there is around $12 billion in assets under management.

Data from Coinglass shows that on Thursday alone there was a record $421 million worth of inflows to ether ETFs, a trend that has been ongoing since early May.

Those shorting ETH could secure an additional yield if they buy spot ETH and stake it for a further 3.5% per year. It’s worth noting that this option isn’t possible for spot ETF purchasers as custody is handled by the ETF provider.

Bitcoin

was a popular asset for traders carrying out the basis trade in 2024 but that yield collapsed in March, which temporarily stalled inflows and muted price action.

A former executive of the hedge fund founded by billionaire Ray Dalio is warning that the market for US debt will soon hit a rough spot.

In a new CNBC Television interview, ex-Bridgewater Associates chief investment strategist Rebecca Patterson addresses how the US dollar has lost about 10% of its value year-to-date, its worst performance in over 50 years.

“I think there are three main things driving the dollar [devaluation]. One is slightly lower frontend rates, interest rates over this period because currencies trade on rate differentials. 

But I think more importantly and what’s different this time is that you’re seeing both re-allocation out of the US both by Americans diversifying and foreigners pulling back slightly. And then third and really importantly is hedging. So let’s say I’m a large overseas pension fund, and I have a tech equity exposure, and I want to keep it because I believe in the structural story, but I’m nervous about the dollar, I’m nervous about the Fed’s independence, I can hedge out that currency risk. 

So even if money stays in US equities, which helps explain where we are today, you can still see that dollar weakness.”

Patterson, who is now the chair of the Council of Economic Education, warns that the dollar devaluation will continue as investors hedge and move their capital elsewhere. She also notes that the ongoing capital re-allocation will negatively impact demand for US debt.

“This isn’t going to be a one-off. This is going to be a slow bleed out of the dollar, and I believe slowly out of US Treasuries.”

Looking closer at US Treasuries, Patterson warns that she sees the bond market facing a demand shortage in the coming months.

“I think this is rather a slow bleed. Most of the foreign investors who have US Treasuries have them in very short tenure bonds, so three years and less. They just have to let them expire and not replace them, so let them roll off. 

Again, it’s not going to be a one-and-done event, I think, without a trigger. It’s just going to be: we don’t have the demand to meet the supply that’s going to be coming, I think early next year.” 

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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The main question surrounding Solana’s price analysis this week is whether it can reach $200 in the short term. Sol currently trades for around $152.50, making it 1.5% less modest over the last 24 hours.

Sol is currently facing heavy resistance at $164 and needs to push this level to entertain the idea of ​​a driving heading towards $200 in July.

(TradingView))

4 Hour Close Key for Solana Price Analysis This Week: Over $153, All Bets Off

Despite the resistance of Sol Price, it shows a critical breakout from the symmetrical triangle. However, to maintain the uptrend, you will need to initially exceed $153 in the 4-hour time frame.

From there, a $164 resistance could be in effect, which could prove an important barrier. Still, Solana was able to follow suit as Bitcoin hovered just below the highest level ever and was ready for a breakout at any time.

SOL’s current trendline has been well-respected since the beginning of July, resulting in a tight compression that appears to be poised to lead to an explosive breakout.

In a higher time frame, the one-day chart shows the patterning of cups and handles. This blends well with the low-box outlook, indicating a move upside the next day.

Solana’s price analysis relies on travelling from Bitcoin this week. This continues to just below $109,000 and appears to be ready to go above $110,000. A movement of this magnitude from major digital assets could give Altcoins such as Sol, such as fuel needed to gain momentum.

Discover: 9+ Best High Risk, High Reward Crypto Buy in July 2025

Catalysts that Possible to Sol Parabolic: Incoming Spot ETFs Do the Trick

$ sol ETFs have seen net inflows of $41 million so far. pic.twitter.com/qa1hmpiph1

– cryptogoos (@crypto_goos) July 9, 2025

Solana appears to be his favorite as the next Altcoin to receive full SEC approval for Spot ETF. Rex-Soprey first launched its Solana Staking ETF earlier this month, and has been a huge success so far, attracting over $41 million inflows during its first four days of trading.

The capital of this substantial amount of institutions flowing through only one ETF product to SOL highlights the substantial desire for spotsol investment from the provision of regulated institutions.

Currently, SECs such as BlackRock, Fidelity, Bitwise and 21 shares have over 10 SOPS SOL ETF applications in SEC.

These are favorites that are given full approval before other Altcoins, and forecast market platform Polymarket has a 99% chance of US-based Solana ETF being approved in 2025.

On the topic of ETFs, US President Trump has officially filed the “Crypto Blue Chip” ETF via his true social platform. SOL is listed as having an 8% allocation within a basket of assets including BTC, ETH, XRP and CRO.

Discovery: Next 1000x Ciphers: 10+ Ciphers tokens that could hit 1000X in 2025

Pump.Fun token release next week is set to bring liquidity and attention back to Solana

@bybit_official I’ll keep it @pumpdotfun $Pump Token Sale on July 12th

$Pump Price: $0.004
Sold Hard Cap: 150b $Pump ($600 million)
Fully dilution: $400 million

Sales will begin at 14:00 UTC on July 12th and continue until 14:00 UTC on July 15th. The pump fan is Solana based… pic.twitter.com/yxs4iloyjt

-cryptodep (@crypto_dep) July 9, 2025

Another underrated event that can provide fuel to potential sor runs within the Solana ecosystem is the $Pump Token public token sale at Pump.Fun.

Token sales begin on July 12th, with the Pump.Fun team expected to raise $600 million through public offerings. Currently, it has been reported that European investors will be banned from participating in the planned pump token sales, which will last for 72 hours.

Next week we may mark a pump token generation event. At that point, you will be able to trade not only with Solana Dexs such as Pump.swap, Raydium, and Meteora, but also with the largest central exchange and Solana Dexs.

The pump token is expected to be the biggest and most exaggerated launch of the year, and could likely bring unprecedented amounts of fluidity and volume to the Solana ecosystem.

Solana’s on-chain transactions are mostly traded in Solpair, so hundreds of millions of dollars of Solana will exchange hands when the pump is running.

Discovery: Next 1000x Ciphers: 10+ Ciphers tokens that could hit 1000X in 2025

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As bitcoin

continues a now multi-week consolidation just below its all-time high of $112,000, an interesting accumulation phenomenon is occurring.

Both short-term and long-term holders have been increasing their stacks as distinct cohorts, which is unusual because these groups typically act in opposite directions, according to Glassnode data.

The chart below from Glassnode illustrates the 155-day threshold used to classify coins as belonging to Long-Term Holders (LTH) or Short-Term Holders (STH).

Since June 22, the LTH supply has increased by 13,000 BTC, returning to an all-time high of 14,713,345 BTC. Meanwhile, over the same period, STHs have grown their BTC supply by more than 60,000 BTC and now hold over 2.3 million BTC.

According to Glassnode data, LTH and STH cohorts usually diverge because LTHs often sell into bull market strength, while STHs tend to buy amid market greed and euphoria.

This alignment suggests that both groups of market participants are expecting higher prices. If both cohorts continue increasing their supply, there is a strong possibility that all-time highs will be surpassed.

One of the investors who called and profited off the subprime mortgage collapse of 2008, Steve Eisman, is brushing off concerns over the rising US budget deficit.

In a new interview on CNBC, the Wall Street investor says the heavy demand for US treasuries from across the globe suggests there’s no cause for worry over the deficit.

“There’s a great slogan that I think really applies to politics and international affairs, which is when someone tells you who they are, believe them. But in the market, when someone tells you who they are, don’t believe them [until when] they actually do something with their money.

So all the people who are pontificating about this… The price of this risk is a 10-year Treasury yield. And what’s happened to the 10-year Treasury yield? It’s been directionless since December of 2022. So the more important question is given that all these people are pontificating about it, why hasn’t it moved? And again, I think the reason is there’s no alternative to Treasuries.

If there was a real alternative to Treasuries, then all of this stuff about the deficit is something that I would pay attention to. But as long as there’s no alternative, there’s nothing to talk about.”

Eisman also says the demand for US bonds all over the world is “insatiable” and that he believes investors will always show up in Treasury auctions to accumulate government debt.

Late last month, Eisman said he was optimistic about the stock market due to the long-term growth potential of the US economy.

“We’ve been in a bull market pretty much for the last 10 years with some fits and starts. And so buy the dip has become almost a religion. It’s a religion that right now I largely subscribe to because I am of the view… that the US economy is more dynamic than it’s ever been in my lifetime. So long term, I am very bullish.”

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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Investor Steve Eisman, who took short positions against the housing market leading up to the 2008 crisis, is sounding the alarm over an event that could trigger a collapse in the stock market.

In a new video on his own YouTube channel, Eisman says that he continues to be long-term bullish on the US stock market, noting that the US economy is in the best position to witness growth and innovation in decades.

But Eisman cautions that escalating geopolitical tensions could obliterate the US economy’s growth potential, sparking a big stock market sell-off.

“We’ve been in a bull market pretty much for the last 10 years with some fits and starts. And so buy the dip has become almost a religion. It’s a religion that right now I largely subscribe to because I am of the view… that the US economy is more dynamic than it’s ever been in my lifetime. So long term, I am very bullish. 

However, the one thing that I worry about is the potential trade war. And here, it’s in no one’s interest for there to be a trade war. But just like in World War I, it was in no one’s interest for there to be a World War I. But because of the reciprocal treaties that countries had, they fell into it. 

I think it’s still possible that there’s a trade war. I don’t know how to handicap it. That is really the only risk in the market. 

As long as there’s no trade war, I’d buy every single dip. If there is a trade war, however, you would see a very big correction.” 

As of Friday’s close, the S&P 500 is trading at a new all-time high of 6,173 points.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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