How do you use the long/short ratio? Let’s use $ETH as an example: the overall account long/short ratio is 3.07 (75.4% long / 24.6% short) (3.07 one hour ago).
I usually look at it in three steps:
① Check for extremes: It’s already at an extreme, and the heavily favored side is more vulnerable to being shaken out by a reversal;
② Check the change: It’s about the same as an hour ago;
③ Check for divergence: The price is up 0.21% over 24 hours, so there’s no obvious divergence for now.
Sentiment staying in the same direction for several consecutive days is more useful than a single day’s reading.
Please do your own research before taking action.
I usually look at it in three steps:
① Check for extremes: It’s already at an extreme, and the heavily favored side is more vulnerable to being shaken out by a reversal;
② Check the change: It’s about the same as an hour ago;
③ Check for divergence: The price is up 0.21% over 24 hours, so there’s no obvious divergence for now.
Sentiment staying in the same direction for several consecutive days is more useful than a single day’s reading.
Please do your own research before taking action.