Yes. The problem with shorting things in cryptocurrency world is poloniex is the most popular place to do it, and there are 2 limitations and a downside:
- Very few coins can be shorted, less than 12, and they are all big coins
- They can only be shorted against bitcoin, which means you need them to fall in value relative to bitcoin, not relative to the US dollar making prediction far more complicated than a normal short position
... meaning if bitcoin drops 10% and the coin your short likewise drops 10%, you break even and paid fees. Best time to short is when bitcoin rallies to the point it causes altcoins to drop. That's really the only time, and you might as well just buy bitcoin on margin and use leverage to ride it higher, rather than shorting.
Downside is also, expect to pay high interest rates at certain times to borrow bitcoin.
RE: How to know when to sell a coin.