Core Premise
New token listings on centralized exchanges represent systematic exit liquidity events where insiders distribute to retail buyers at inflated prices.
The Playbook (70-80% of Lower-Tier CEX Listings)
Phase 1: Pre-Listing Setup
- Insiders/VCs/airdrop recipients accumulate at $0.001-$0.01
- Limited DEX liquidity prevents large-scale exits
- Cost basis: 10x-100x lower than listing price
Phase 2: Announcement Pump (0-2 hours)
- Listing announced → retail FOMO begins
- Price spikes 50-300% on low liquidity
- This is the distribution window
Phase 3: The Dump (2-24 hours) ← SHORT HERE
- Massive exchange deposits ($5M-$20M typical)
- Insiders sell into deep CEX order books
- Price crashes 30-70% from peak
- Smart money exits 70-100% of positions
Phase 4: Capitulation (24-72 hours)
- Remaining holders panic sell
- Volume collapses
- Token enters slow bleed phase
Why This Works
1. Information Asymmetry
- Insiders know listing timing
- Retail learns last, buys tops
2. Liquidity Unlock
- CEX = first opportunity for $1M+ exits
- DEXs cannot absorb insider selling
3. Incentive Misalignment
- Early holders: 50x-100x profit at any price
- Retail buyers: Underwater immediately
4. No Supply Constraints
- Unlocked tokens flow freely
- No vesting = no protection
Short Entry Signals (All Must Align)
✅ Exchange Deposit Spike: $5M+ flowing to CEXs within 6 hours
✅ Smart Money Exit: Top PnL traders reducing 70%+ of positions
✅ Price Rejection: Failed bounce attempts after initial -20% drop
✅ Sell Volume Dominance: 2:1+ sell vs buy volume ratio
✅ Lower-Tier Listing: BitMart/Gate/Bybit (not Binance/Coinbase)
Entry & Risk Management
Entry: After initial -20-30% drop, short any relief rally
Position Size: 2-3% max (extreme volatility)
Stop Loss: Above intraday high (+20-30% from entry)
Targets: -30% to -50% from peak over 24-72 hours
Time Horizon: Close within 72 hours maximum
Invalidation Criteria (Exit Immediately)
❌ Major tier-1 exchange announces listing (Binance/Coinbase)
❌ Exchange withdrawals exceed $5M (re-accumulation)
❌ Smart money wallets begin buying
❌ Price reclaims intraday high on volume
❌ Significant fundamental news (partnership/product launch)
Exceptions (Do NOT Short)
- Tier-1 Listings: Binance/Coinbase have better track records
- Vested Supply: Team/VC tokens locked 6-12+ months
- Established Projects: Tokens with working products and users
- Market Maker Support: Genuine liquidity provision (not dumping)
Historical Success Rate
- 70-80% of lower-tier CEX listings follow this pattern
- Average decline: -40% to -60% from peak within 72 hours
- Win rate: High when all entry signals align
- Risk: Extreme volatility can cause stop-outs on bounces
Execution Summary
This is a systematic arbitrage of information asymmetry. Insiders accumulate cheap, retail FOMOs on listing hype, insiders distribute via exchange liquidity. Short the distribution, take profits within 72 hours, move on.
Key Edge: Onchain data reveals the distribution in real-time via exchange deposit tracking and retail doesn’t monitor this.
