How do you use the long/short ratio? Let’s use $SOL as an example: large holders’ long/short ratio is 2.50 (71.4% long / 28.6% short), compared with 2.47 one hour ago.
I usually look at it in three steps:
① Check for extremes: It’s currently skewed toward an extreme. The side with overwhelming positioning is often the one that gets caught on the reversal.
② Check the change: More traders are long than one hour ago.
③ Check for divergence: The price is up 2.02% over 24 hours, and there’s no obvious divergence at the moment.
Sentiment data can serve as a warning, but it shouldn’t be used on its own to guide buying or selling.
#SOL
Just a personal note, not a recommendation to trade.
I usually look at it in three steps:
① Check for extremes: It’s currently skewed toward an extreme. The side with overwhelming positioning is often the one that gets caught on the reversal.
② Check the change: More traders are long than one hour ago.
③ Check for divergence: The price is up 2.02% over 24 hours, and there’s no obvious divergence at the moment.
Sentiment data can serve as a warning, but it shouldn’t be used on its own to guide buying or selling.
#SOL
Just a personal note, not a recommendation to trade.
