How do you use the long/short ratio? Let’s use $AIN as an example: the platform-wide account long/short ratio is 0.48 (32.3% long / 67.7% short), compared with 0.51 one hour ago.
I usually look at it in three steps:
① Check for extremes: It’s already skewed toward an extreme, and the crowded side is often vulnerable to a reversal.
② Check the change: More accounts are short than one hour ago.
③ Check for divergence: The price is up 39.7% over 24 hours, yet shorts still outnumber longs. Watch for short covering.
Sentiment indicators should be considered alongside price; looking at them alone can be misleading.
This is not investment advice. You are responsible for your own gains and losses.
I usually look at it in three steps:
① Check for extremes: It’s already skewed toward an extreme, and the crowded side is often vulnerable to a reversal.
② Check the change: More accounts are short than one hour ago.
③ Check for divergence: The price is up 39.7% over 24 hours, yet shorts still outnumber longs. Watch for short covering.
Sentiment indicators should be considered alongside price; looking at them alone can be misleading.
This is not investment advice. You are responsible for your own gains and losses.