Shanzhai Coin Short Squeeze Strategy Practice: AI Builds Anomaly Signal Monitoring Robot

Recently, opportunities for short squeezes in altcoins have frequently appeared. The author successfully captured the $VOXEL market through an AI monitoring system. This article will deeply analyze the strategic logic and teach you step-by-step how to create a dedicated monitoring bot using Prompts.

The current cryptocurrency market is affected by macro policies, leading to a tightening of liquidity in risk assets. Large holders of altcoins are facing liquidity dilemmas: how to sell in the spot market? The perpetual contract market is becoming a new battleground for these holders to cash out!

1. Strategy Derivation Logic#

How do holders use the perpetual contract market to exit? The following are the logical derivation steps:

1. Holder's Dilemma#

Huge spot positions
Direct selling triggers a price avalanche
Insufficient market depth makes it hard to sell

2. Contract Breakthrough#

Forced buying during short stop-loss/liquidation
Perpetual contracts provide a liquidity exit

3. Short Induction Strategy#

Raise spot prices (manipulate the mark price)
Attract retail investors to short contracts

4. Rate Arbitrage#

Short accumulation leads to negative rates
Holders profit from long positions to earn double returns

5. Ultimate Harvest#

Push up to key resistance levels
Trigger concentrated short liquidations
Complete chip distribution and reverse to short

The essence of this strategy is to utilize the forced buying from short liquidations to create a liquidity exit channel for the holders.

2. Core Monitoring Dimensions#

The complete short squeeze cycle presents the following data characteristics:
Extreme negative rates → Abnormal growth in OI → Breakthrough resistance levels → Long-short ratio decreases → Indicators revert

Key monitoring indicators are as follows:

1. Abnormal Funding Rate#

Negative value breaks the -0.1% threshold
Indicates extremely high control of the spot market
Signals potential short squeeze layout

2. OI Anomaly#

Short-term OI increase exceeds 100%
Holders build positions by receiving short chips

3. Price Breakthrough Behavior#

Breakthrough of key resistance zones
Triggers short liquidation procedures

4. Indicator Recovery Signals#

OI volume diminishes
Rates revert to normal values
Long-short ratio rebounds

Abnormal fluctuations in funding rates and OI are core indicators for early warnings!

3. AI Monitoring System Construction#

Automated monitoring is achieved through Python + Telegram Bot, with key implementation steps:

1. Data Collection Module#

Obtain key data for perpetual contracts from the Binance API:

Mark price / Index price
Basis and percentage
Funding rate
Open interest (OI)
Long-short account ratio
Large holder position ratio
Taker buy-sell ratio
(API documentation: https://developers.binance.com/docs/derivatives)

2. Data Storage Mechanism#

5-minute level data scraping
Store CSV files by trading pair
Historical data path: data/{symbol}.csv

3. Intelligent Alert System#

Composite trigger condition settings:

Absolute value of funding rate > 0.1%
Short-term OI average (3 periods) / Long-term OI average (10 periods) > 2
Alerts pushed via Telegram Bot after triggering

After deploying this monitoring system, it is recommended to set stop-loss and take-profit levels in conjunction with technical analysis. Market opportunities continue to exist; deploy your digital sentinel immediately!

Original @AI Soros Kote

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