A recent Datascope analysis shared via CryptoQuant showed that extreme swings in the ratio of long/short volume to open interest often signal major market reversals.
This is what makes this metric key to monitor in investor behavior.
A higher ratio suggests bullish sentiment, while a lower one indicates bearish expectations.
Datascope’s historical data shows an inverse relationship between this ratio and the price of Bitcoin. Spikes in long positions usually precede price corrections, while most short positions often mark the bottom of the market, indicating potential recoveries.
Datascope currently maintains a short-term bearish view on BTC due to the recent spike in the long/short ratio, signaling excessive optimism. This pattern has historically led to market corrections, reinforcing the need for caution.
On Tuesday, U.S. spot Bitcoin ETFs saw a notable outflow of $242.53 million, marking the largest single-day withdrawal since early September. This movement halted an eight-day streak of positive inflows.
The cryptocurrency market offers numerous opportunities but also presents significant challenges due to its volatility and shifting trends.
According to a JPMorgan report, in September the average Bitcoin (BTC) price and network mining rate rose slightly, while daily mining revenue and gross profits declined for the third consecutive month.
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