Shanzhai Coin Short Squeeze Operation AI Builds Automatic Tracking Abnormal Fluctuation Robot Program

Recently, opportunities for short squeezes in altcoins have frequently emerged. I successfully captured the unusual movements of $VOXEL by building a monitoring system using AI. This article will decode the strategic logic and share tips for constructing monitoring bots.

The current cryptocurrency market is showing a risk-averse trend due to macro policy disturbances, with liquidity in risk assets tightening. Holders of large amounts of altcoins face a core dilemma: how to distribute chips when liquidity in the spot market is exhausted? The perpetual contract market is becoming a new liquidity solution, providing traders with an excellent window to dance with the whales.

I. Analysis of Strategy Operation Mechanism#

How do whales exit through perpetual contracts? Here is the complete logical chain:

1. Whale's Predicament#

Holding a massive spot position, but the market depth is insufficient; direct selling may trigger a price collapse.

2. Breaking the Contract Market#

Using forced buying behavior during short stop-loss/liquidation to create a liquidity exit for whales.

3. Short Induction Strategy#

By raising the spot price (affecting the mark price), inducing retail investors to establish short positions in perpetual contracts.

4. Rate Arbitrage#

The gathering of shorts leads to a discount in contract prices, and negative funding rates become an additional source of income for whales holding long positions.

5. Ultimate Harvest#

Pushing the price to key resistance levels or liquidation zones, forcing shorts to buy back, allowing whales to complete chip distribution and potentially short again.
The essence of this strategy is to utilize the forced liquidation mechanism of the contract market to convert shorts into liquidity providers.

The essence of this strategy is to utilize the forced liquidation mechanism of the contract market to convert shorts into liquidity providers.

II. Key Monitoring Indicator System#

The entire short squeeze process exhibits typical data characteristics:
Extreme negative funding rate (verifying whale control) → OI abnormal growth (main force positioning signal) → Resistance level breakthrough (liquidity release) → Long-short ratio decline (retail liquidation) → OI retreat & funding rate normalization (market conclusion)

To accurately capture short squeeze signals, focus on the following dimensions:

1. Extreme Funding Rate#

When the funding rate is <-0.1%, it indicates that whales have gained control over spot pricing, with retail shorts overly concentrated.

2. OI Abnormal Movements#

A short-term surge in OI (3-period average/10-period average > 2) suggests the main force is entering the layout.

3. Price Breakthrough Behavior#

Effectively breaking previous highs or key resistance levels triggers a chain reaction of short stop-losses.

4. Data Regression to Normal#

The long-short ratio rises, OI declines, and the funding rate returns to baseline values, indicating the end of the short squeeze market.
The abnormal resonance between funding rates and OI is a core indicator for capturing early signals!

III. AI Monitoring Robot Construction Guide#

Is manual monitoring inefficient? The following prompts will help you build an automated monitoring system, achieving real-time alerts through Python + Telegram Bot:

1. Data Collection Module#

Obtain key indicators of perpetual contracts from the Binance API:

Mark price & Index price
Basis & Basis rate
Funding rate & OI
Account long-short ratio & Large holder position ratio
Taker buy-sell ratio
(API documentation: https://developers.binance.com/docs/derivatives)

2. Data Storage System#

Set a 5-minute scheduled task
Store by trading pair to data/{symbol}.csv

3. Intelligent Alert Mechanism#

Set composite trigger conditions:

Absolute value of funding rate > 0.1%
Short-term OI increase (3-period/10-period) > 200%
Breakthrough of the upper Bollinger Band or ATR channel
When conditions are met, push alerts via Telegram Bot, along with snapshots of key indicators.

Mastering the above prompts will allow you to build a professional-grade monitoring system. It is recommended to set dynamic take-profit and stop-loss levels in conjunction with technical analysis. Market opportunities are fleeting; deploy your AI trading assistant now!

Original @AI Soros Kot

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