L'INFORMATEUR CRYPTOHome › Glossary › Long/short ratio
Long/short ratio: definition
The long/short ratio compares the number of accounts (or volume) holding long and short positions on a crypto's futures.
Definition
A ratio of 2 means there are twice as many long accounts as short accounts. Exchanges also publish the ratio of top traders, i.e. the biggest accounts.
How to read it
- Very high account ratio: the crowd is buying. Often a contrarian signal, because the market tends to liquidate the majority side.
- Top traders disagreeing with the crowd: worth watching, big accounts often have better timing.
Pitfalls to avoid
The ratio counts accounts, not amounts: 1,000 small longs can weigh less than a single big short. Cross-check it with open interest and funding.
Frequently asked questions
Is a high long/short ratio bearish?
Not automatically, but very unbalanced positioning increases the risk of an opposite move aimed at liquidating the majority side.