How do you use the long/short ratio? Take $BR as an example: the network-wide account long/short ratio is 1.33 (57.1% long / 42.9% short) (1.18 one hour ago).
I generally look at it in three steps:
① Check for extremes: it isn't crowded yet, so its reference value is limited;
② Check the change: more traders are going long than an hour ago;
③ Check for divergence: the price is up 24.07% over 24h, with no major divergence for now.
Volatility often increases after the data becomes heavily skewed to one side.
#BR
I generally look at it in three steps:
① Check for extremes: it isn't crowded yet, so its reference value is limited;
② Check the change: more traders are going long than an hour ago;
③ Check for divergence: the price is up 24.07% over 24h, with no major divergence for now.
Volatility often increases after the data becomes heavily skewed to one side.
#BR