Long/Short Ratio cryptocurrency
How is the long-to-short ratio calculated in futures, what values are considered extreme, and why is the metric read "in reverse"—contrarian, in conjunction with funding and liquidations?
Ratio = longs ÷ shorts. A value of 1.5 means that for every short, there are one and a half longs (60% versus 40%). Exchanges publish two ratios: by the number of accounts and by the position volume.
When almost everyone is long, there's no one left to buy—the market is vulnerable to a cascade of liquidations. An extreme overweight on one side is more often a signal of a reversal than of continuation.
Aggregated statistics of positions are published by the exchanges themselves (Binance, OKX, Bybit) through open APIMethodologies vary, so it's impossible to directly compare values between exchanges.
Funding shows which side is paying for the overhang, and the liquidation feed shows where overloaded positions are already being eliminated. Both metrics are calculated from our own real-time data.
How to use Long/Short Ratio in trading?
Long/Short Ratio Shows what percentage of traders on a particular exchange hold long positions and what percentage hold short positions in the futures market. This is aggregated data based on the positions of all accounts trading perpetual futures on Binance, OKX, Bybit and other major derivatives platforms.
The key feature of this indicator is its contrarian nature. In March 2024, when Bitcoin installed a new one ATH above $73,000, longs on Binance held over 72% of open positions—an extreme ratio. It's precisely under these conditions that the market is most vulnerable: most are already long, buying power is exhausted, and any negative event triggers a cascade of liquidations.
The opposite situation: in November 2022, at the peak of panic around FTX, the share of shorts jumped to 60-65%. Most were either shorting the market or exiting their positions. This historically coincided with the formation of a bottom: shorts were "too right," and the slightest positive shift could trigger a short squeeze.
Interpretation of extreme values
Extreme long overweight
The market is biased toward buyers. Most are betting on growth. This is interpreted contrarianly: buying power is close to exhaustion, and the risk of long positions being liquidated is increasing. This isn't a sell signal, but a reason to lower leverage.
Extreme shorts overweight
The market is in fear, with most shorts or staying out of the market. Contrarian signal: potential for a short squeeze. If a positive catalyst emerges, the upward movement is reinforced by forced buybacks of shorts.
Neutral zone
The market is in relative equilibrium. Neither longs nor shorts have a significant advantage. Price movement is determined by external factors—news, technical analysis, and on-chain data.
A sharp change in an hour
A rapid shift in the ratio (more than 3-5% over a few hours) is an important signal. Large-scale liquidation of longs or shorts changes the ratio. This confirms the current price movement and its strength.