📢 Pay attention to this simple indicator if you want perfection in your entries & exit.
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I guess everyone knows about the first one, but the second one is what I'm about to explain.
This is the 1H Long/Short Ratio of the crypto futures market.
Now the question is "Is this data exchange specific"?
The answer is Yes. And this is the data of Binance. But Binance being the boss which has a 24H trading volume in double digits (13.3 B), other exchanges are nowhere near Binance & literally miles away. Even coinbase ranked 2nd had a 24H volume of 2B, six times less than Binance.
Hence, it is proved Binance is the market driver.
🚨 So how this data is helpful?
Now this refers to the ratio of the total long and short positions held by top traders , specifically the proportion of net long and net short positions to total open positions of the top 20% users with the highest margin balance.
It allows retail investors to intuitively perceive the position changes of top users and observe the timing of their opening and closing positions. In summary this is a sentiment analysis indicator related to the views and actions of market traders.
It's important to note that the cryptocurrency market operates as a zero-sum game, where smaller retail traders are at risk of being outperformed by larger traders.
For example, when the long/short ratio becomes excessively high, with an overwhelming number of long positions, there may be a risk of a price drop due to a reverse harvest. The opposite becomes true when there is an overwhelming number of short positions, e.g. yesterday that long was 67%, touching even 69% when the entire market plummeted.
Remember that in the market, it's usually a small portion of people who make money. As Warren Buffett said, "Be fearful when others are greedy and greedy when others are fearful."