Which CEX liquidity data and indicators SHOULD you use?
In this THREAD I will explain;
1. $BTC LONG/SHORT Ratio.
2. Cumulative Volume Delta (CVD) Indicator.
3. Combine CVD with other Indicators.
๐งต(1/8)
In this THREAD I will explain;
1. $BTC LONG/SHORT Ratio.
2. Cumulative Volume Delta (CVD) Indicator.
3. Combine CVD with other Indicators.
๐งต(1/8)
1. $BTC Long/Short Ratio:
The #Bitcoin LONG/SHORT ratio represents the ratio of open LONG positions to open SHORT positions on a certain Exchange.
It can be used as an indicator of market sentiment or trader positioning.
The #Bitcoin LONG/SHORT ratio represents the ratio of open LONG positions to open SHORT positions on a certain Exchange.
It can be used as an indicator of market sentiment or trader positioning.
1.1 To calculate the exchange $BTC LONG/SHORT RATIO:
Divide the number of open long positions and the number of open short positions on the exchange.
If there are 3,000 open long positions and 1,000 open short positions, $BTC long/short ratio would be 3:1
Divide the number of open long positions and the number of open short positions on the exchange.
If there are 3,000 open long positions and 1,000 open short positions, $BTC long/short ratio would be 3:1
If the LONG/SHORT ratio is 3.0, it doesn't mean that the capital invested in LONG positions exceeds that in SHORT positions.
It indicates that the number of individuals holding LONG positions is 3.0 times higher than the number of individuals holding SHORT positions
It indicates that the number of individuals holding LONG positions is 3.0 times higher than the number of individuals holding SHORT positions
2. CVD (Cumulative Volume Delta) :
Is a trading indicator that measures liquid volume inflow for an asset.
This indicator displays the Cumulative Volume changes, based on the volume traded by sell aggressors and buy aggressors.
Is a trading indicator that measures liquid volume inflow for an asset.
This indicator displays the Cumulative Volume changes, based on the volume traded by sell aggressors and buy aggressors.
2.1 Pillars of CVD: Volume, Price and Time
- It tracks the difference between the buying and selling volume at any given time.
- Identifies imbalances in the market.
- Spots divergences between volume and price.
- Divergences can be a strong signal of a potential trend change
- It tracks the difference between the buying and selling volume at any given time.
- Identifies imbalances in the market.
- Spots divergences between volume and price.
- Divergences can be a strong signal of a potential trend change
3. Combine CVD with other indicators:
- Personally, I combine RSI when using CVD. Gives you a hedge to identify trend reversals.
- You may also combine CVD with Fibonacci Retracement Levels.
- CVD and Open Interest also gives you a hedge on the open/closed positions.
- Personally, I combine RSI when using CVD. Gives you a hedge to identify trend reversals.
- You may also combine CVD with Fibonacci Retracement Levels.
- CVD and Open Interest also gives you a hedge on the open/closed positions.
I hope this THREAD has helped you to understand the #Bitcoin LONG/SHORT ratio and CVD indicator.
If you learn with this THREADS about on-chain data and indicators, I will do them more often.
RT and FAV to spread the THREAD is appreciated.
If you learn with this THREADS about on-chain data and indicators, I will do them more often.
RT and FAV to spread the THREAD is appreciated.
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