The long-short ratio compares the number of long positions (expecting a price increase) to short positions (expecting a decline) across major futures exchanges. It specifically applies to perpetual without expiry dates that mimic spot prices while allowing leverage.
A ratio greater than 1 indicates a bullish leaning, with a greater number of traders going long. A ratio less than 1 indicates bearish sentiment. For example, if the ratio is 1.2, it would indicate that there are 1.2 long positions for every short. This data should not be looked at in terms of price prediction, but it does show crowd psychology.
