According to @QCompounding, prolonged market irrationality can outlast a trader’s solvency, so capital preservation should take priority over chasing momentum, source: Compounding Quality on X, Dec 7, 2025, https://twitter.com/QCompounding/status/1997652880778502162. The author warns that bull markets can hide risk until liquidity recedes and exposes weak positions, a clear signal to avoid hype-driven equities and similarly volatile assets in crypto markets, source: Compounding Quality on X, Dec 7, 2025, https://twitter.com/QCompounding/status/1997652880778502162. For trade execution, this guidance points to tighter risk controls and disciplined entries during euphoria rather than impulsive trend-chasing that can lead to sharp drawdowns, source: Compounding Quality on X, Dec 7, 2025, https://twitter.com/QCompounding/status/1997652880778502162.

According to @ai_9684xtpa, a prominent smart money address, which previously generated significant profits from 14.81 million USDe with $2.82 million in capital, is now facing a $12.48 million unrealized loss. The source indicates these losses stem from short-selling a basket of altcoins. This situation serves as a stark warning for traders, demonstrating that even a previously successful strategy like shorting can lead to substantial losses when met with a sharp market rally, quickly erasing prior gains. The trader reportedly employed a strategy of taking larger short positions on high-market-cap assets and smaller positions on lower-cap ones, which proved ineffective against the recent broad-based uptrend.