TechFlow News — Andrew Kang, co-founder of Mechanism Capital, pointed out on Twitter that certain heuristic strategies work under PvP market conditions but not under PvE market conditions.
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First, one should not overly focus on high funding rates or prices that only go up. In a bull market, funding rates may remain elevated for extended periods, and short positions may not be sustainable.
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Second, pay attention to capital rotation. New inflows do not diversify their investments like experienced crypto traders; instead, they pick their favorite meme coins and keep allocating portions of their paycheck daily or weekly to continue buying. Traders who short meme coins due to meme coin rotation will ultimately be eliminated.
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