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How important is long/short ratio (LSR) position!

2020/06/12 (Friday)

Summary

6/12 Small level breakout is happening and Bitcoin (BTC) breakdown the ascending channel. Bitcoin (BTC) is correcting again, the low even to $9101. Now, BTC establish the congestion area between $9200-9400 and there are support level at $9000-9100 (Weak), $8700 (Middle) and $8200 (Strong).

 

If BTC price is able to go back the ascending channel within 2-3 days, the pattern target of the breakup from the symmetrical triangle is still $11800-11600 (blue dotted line in the picture). Conversely, bullish view will be invalidated if price breakdown the support level of ascending channel ($9500) with increasing volume, and the pattern target may be $8150-8200 (blue line in below picture).

 

How important is long/short ratio (RSL) position! 

When I analyzed the LSR data, I find long position of retail investor is increasing quickly at HKT 6/11(Thursday) 14:00pm. 

You can see the below chart,

 

During HKT 6/11 14:00- 6/12 14:00 (-786USD):

LSR 0.88 -> 1.25

Long position of retail investor is increasing rapidly from 46.78% to 55.59% (Bullish).

Conversely, long position of market maker (or Institutional investors) is decreasing from 53.38% to 52.6% (Bearish).

 

When retail investors opened a lot of long positions, the BTC price usually starts to fall because the fuel of short-squeeze (bullish) is not enough. That is, when retail investors are greedy, correction of market is coming soon. There are some similar cases marked with blue and yellow arrows in the below picture, downside including 5/8 ->5/10, 5/18 -> 5/25, 6/2 ->6/3 and upside is 5/27 -> 6/2.

Hence, we should keep an eye on the position trends of retail investors.

 

History will not be the same, but history always repeats itself in an amazing (similar) way.

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As an analyst, I think that I can't predict the direction of market, but I am ready for a strategy of bullish or bearish.

Yu-Shiuan Chen

 

 

 

 

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