How do you use the long/short ratio? Take $ETH as an example: the global account long/short ratio is 3.30 (76.8% long / 23.3% short) (3.31 one hour ago).
I usually look at it in three steps:
① Check for extremes: It’s already quite extreme, and the heavily crowded side often gets shaken out;
② Check the change: Short positions have increased compared with one hour ago;
③ Check for divergence: The price is down 1.94% over 24h, but more traders are still going long as the price falls—watch out for a long squeeze.
Sentiment is a lagging indicator, so don’t rely on it too heavily.
#VitalikWarnsAICouldAccelerateTheErosionOfCryptographicSecurity
The above is for reference only. Please make your own trading decisions.
I usually look at it in three steps:
① Check for extremes: It’s already quite extreme, and the heavily crowded side often gets shaken out;
② Check the change: Short positions have increased compared with one hour ago;
③ Check for divergence: The price is down 1.94% over 24h, but more traders are still going long as the price falls—watch out for a long squeeze.
Sentiment is a lagging indicator, so don’t rely on it too heavily.
#VitalikWarnsAICouldAccelerateTheErosionOfCryptographicSecurity
The above is for reference only. Please make your own trading decisions.