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Recently, the MYX market has experienced significant Fluctuation, with open interest plummeting from over 200 million USD to over 80 million USD. Behind this rapid capital movement lies a complex market operation mechanism.

First of all, short liquidation has become an important channel for the rapid transfer of funds. When short positions are forcibly liquidated, the system will automatically execute buy orders, and traders holding long positions can take this opportunity to close their positions for profit.

Secondly, short stop-loss orders also provide a large amount of buying pressure to the market. The MYX price fluctuates frequently between 12 dollars and 18 dollars, while the funding rate often reaches the limit of -2%. During the price increase and the rise in funding rates, many shorts choose to stop-loss, and these buy-to-cover orders facilitate long positions to close.

In addition, the fluctuation patterns of the market have attracted many traders to try going long. The price rebounded from the $12-13 range to above $18, combined with high funding fees, which has drawn some speculators into the market to go long, attempting to capture short-term gains and funding fee profits. These new long positions also provide opportunities for holders to take profits.

It is worth noting that even without completely closing positions, maintaining a high funding rate can bring considerable daily returns to long position holders. It is estimated that millions of dollars in funding may flow from short to long positions each day.

However, the market does not always move in a direction favorable to the bulls. If the number of buyers increases, the market may experience a reversal, forcing a sell-off through short positions to squeeze the liquidity of the bulls. Considering the insufficient liquidity in the spot market, prices may fluctuate sharply in a very short period.

In this complex market environment, investors need to be particularly cautious and fully recognize the high-risk nature of the market. For ordinary investors, understanding these market mechanisms may help make more informed trading decisions, but it should also be recognized that risk management is always the primary consideration in a highly fluctuating market.