2026-01-20 03:28:04

It's an interesting question worth pondering: why can certain stock markets continue to rise for many years, yet the market doesn't easily overheat and require active cooling?

The answer actually lies in a well-developed short-selling mechanism. Imagine that when even individual stocks support short-selling, any investor who believes the price is overinflated can express their judgment through shorting. What does this mean? It means that there are both bullish voices pushing prices higher and bearish forces balancing each other out.

As a result, even if there are continuous increases, it is the outcome of full game-playing among all market participants—frenzy and rationality have fully clashed in trading. In such an environment, simply labeling the rise as a "crazy bull" is not entirely fair, because the price has already absorbed the market's bullish and bearish opinions. This perhaps also explains why not all rises need to be cooled down; the market itself has a correction mechanism.

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TheShibaWhisperer

· 23h ago

The short-selling mechanism is really key; without it, the market is easily manipulated.

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MerkleMaid

· 23h ago

The short-selling mechanism is really the market's painkiller; without it, things would have gone haywire long ago.

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DefiPlaybook

· 23h ago

According to on-chain data, the short-selling mechanism can indeed significantly reduce market bubble risks. Historical data shows that markets supporting margin trading have an average volatility reduction of about 23%. However, there is a point worth discussing—although the crypto market has perpetual contracts for shorting, TVL and liquidation risks are actually continuing to rise. This indicates that the short-selling mechanism itself is also a double-edged sword.

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AirdropDreamBreaker

· 23h ago

The short-selling mechanism is indeed interesting, but can the domestic system compare? Without short-selling, there's no check and balance, ultimately leading to a one-sided market. By the way, is it easier to make money or lose money in a market with a perfect short-selling system? No one can say for sure. Why does this logic also seem not entirely solid? What about the circuit breaker mechanism? Balancing longs and shorts sounds good, but in actual operation, who is really doing short-selling? This kind of theory is just for listening; the real market isn't so idealized. Aren't you all afraid of a pullback when trading stocks? Why would you want the short-selling force to be strong? Forward this to the group of people who keep shouting about a bull market every day, and let them learn what a game of strategy really is.

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LightningHarvester

· 23h ago

The short-selling mechanism is indeed key; the domestic market is just too easily demonized. I agree with this logic—balance between bulls and bears is the true pricing power. Oh my, finally someone has explained it thoroughly. Not every rise should be met with calls to cool down. The bubble problem caused by the lack of short-selling really needs to be reflected upon. It's easy to say, but the key is to truly open up short-selling.

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