How do you use the long-short ratio? Take $SOL as an example: the long-short ratio across all accounts is 3.28 (76.6% long / 23.4% short) (3.29 one hour ago).
I usually look at it in three steps:
① Check for extremes: things are relatively extreme right now, and the crowded side often gets caught on the reversal;
② Check the change: short positions have increased compared with one hour ago;
③ Check for divergence: the price is down 2.03% over 24 hours, but more traders are still going long despite the drop—watch out for long-position stop-losses.
Looking at volume, price, and open interest together is more reliable than looking at sentiment alone.
#SOL
This may not be accurate, so don’t take it as advice.
I usually look at it in three steps:
① Check for extremes: things are relatively extreme right now, and the crowded side often gets caught on the reversal;
② Check the change: short positions have increased compared with one hour ago;
③ Check for divergence: the price is down 2.03% over 24 hours, but more traders are still going long despite the drop—watch out for long-position stop-losses.
Looking at volume, price, and open interest together is more reliable than looking at sentiment alone.
#SOL
This may not be accurate, so don’t take it as advice.
