Identify Oversold Coins
💡 Understanding Oversold Altcoins
Trends in crypto markets can persist longer than expected. Simply buying an altcoin because it's oversold is rarely a profitable strategy. Prices can remain depressed for various reasons, including:
Insiders are selling to fund their protocol.
Weak overall market conditions, such as Bitcoin (BTC) and Ethereum (ETH) in daily downtrends.
Reduced incentives that no longer entice long-term holders (HODLers).
However, excessive selling pressure eventually leads to mean reversion, even in the most criticized projects. Cardano (ADA) and Polygon (MATIC) serve as prime examples—despite large losses and heated debates, both managed to reclaim their previous all-time highs (ATHs) and beyond.
🎯 Short Squeeze: A Profitable Trading Setup in Altcoins
One of the most reliable trade setups involves short squeezes in altcoins with excessive short funding in futures markets.
📅 For example, in early 2022:
Many Solana ecosystem pairs were down 90%, and short-sellers were paying hundreds of percentage points in fees (APY) just to hold their positions.
Notable traders, such as GCR (FTX leaderboard), were making millions daily.
As more traders copied the short strategy, the trade became overcrowded, leaving little room for further downside.
💥 The result? One of the most epic short squeezes in crypto history.
Example: MAPS Short Squeeze (2022)
The cost of shorting MAPS exceeded 5% per day, equating to a 1,825% annualized fee.
This extreme short interest led to an aggressive price reversal, forcing short-sellers to cover their positions rapidly.
🧠 How to Identify Excessively Oversold Altcoins
Step 1: Use CoinRotator’s Advanced Settings
Set the signal streak to 20+ to find heavily oversold altcoins.
CoinRotator helps track both new trends and stale, excessively sold-off ones.
Step 2: Check Futures Funding Rates
Depending on your broker, you can monitor negative funding rates at:
FTXPremiums.com
BinancePremiums.com
Alternative sources: Coinglass or CoinAnalyze
If funding rates are highly negative, it signals excessive short interest—potentially setting up a short squeeze.
Step 3: Set a Supertrend Alert
Use TradingView alerts or Coinrotator alerts if you’re a Keypass user to notify you when the price closes above the Supertrend indicator.
Need help? Join our Discord community, where we provide guidance on setup.
Step 4: Monitor for Bullish News Events
A fundamental catalyst can accelerate mean reversion.
Example: MATIC & DUSK announced bullish news during a crypto dev conference in Amsterdam, putting upside pressure on prices.
🛑 When to Exit: Knowing If the Trend Won’t Recover
To avoid holding onto a losing trade indefinitely, follow these guidelines:
✔️ Allow some breathing room for the position. ✔️ Set a time limit—if the market doesn’t recover within one to two weeks, it’s likely not bouncing. ✔️ Use a mental stop loss to minimize unnecessary losses. ✔️ Avoid overleveraging—risk only a small percentage of your portfolio per trade.
🔴 Avoid "all-in" trades hoping for a massive win—this mindset leads to failure in crypto trading.
Final Thoughts
If you found this strategy useful and want to explore CoinRotator, join our Discord community. We’re a group of traders sharing ideas—no sales, no egos, just learning and good trades.
🚀 Happy Trading!
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