The recent trend of #BTC has been to raise prices and sell off; this is my judgment. I have been constantly observing the data and the indices. Then I noticed that the large holders' long-short ratio has remained high, and even when there was a shift later on, it remained the same.
Thus, I began to doubt these data; the generation of these figures and indicators is fundamentally derived from exchange data, which is not surprising, after all, they are all in the same boat.
I organized some information; many times, large holders will deliberately create a visual effect of 'counter-direction positions' in their trading strategies. For example: initiating positions in advance + placing reverse orders. Large holders complete the main directional layout (for instance, wanting to short) but place a large number of long orders before the data is updated, creating the impression that 'long positions prevail' to guide retail investors to follow suit and go long, then they sell off.
Hedged positions are disguised; large holders might short in one account and go long in another, or hedge between spot and futures. Looking at just one data metric, one cannot discern the true intent.
Distributed position building; large holders gradually build positions through multiple accounts and only push the positions uniformly once the direction is basically confirmed. At that point, the data begins to show, but it is too late.
Thus, the apparent long-short ratio ≠ true intent; it is more like a 'packaged' market sentiment inducement.
1. Practical Response Strategies
If the long-short ratio is high but CVD is flowing out, one needs to analyze large on-chain transfers and options market sentiment simultaneously to avoid being misled by a single indicator. Utilize tools to monitor the flow of funds in the exchange’s hot wallet to assist in determining the main force's direction.
Slippage management; large holders splitting orders might lead to short-term liquidity fluctuations. Setting limit orders can prevent slippage losses, hedge spot and futures risks, and reduce the impact of directional misjudgments.
When market sentiment is extremely biased towards long/short, beware of reverse operations by the main force. Analyze the order book for large order distributions to identify false orders, such as frequent cancellations or thin order volumes.
2. Typical Signals of Raising Prices to Sell Off
BTC price breaks through previous highs, Binance large holders' long position ratio rises to 1.8, but funding rates quickly turn positive, and CVD flows out for three consecutive days. The main force creates the illusion of a breakout by raising prices, attracting retail investors to go long before selling off; at this point, if OI increases simultaneously but the price stagnates, it can be seen as a high-risk signal.
Pay attention to the dynamic adjustment cycle of main positions, such as before and after quarterly contract settlements, to capture trend turning points more accurately.