Everyone still hasn’t figured out why the price of cryptocurrencies rises and falls, how it rises and falls? 🎈 (Lettuce dry goods)
There are always as many long positions as there are short positions. Shorting happens because there are people going long, and the opposing orders are always equal, you know?
The short position orders you execute are because someone is going long; you both complete the transaction, just like in spot trading. You sell because someone buys, and you buy because someone sells. Going short and going long are the same; the transaction volume of your short position is the volume that others are going long. If no one goes long, you can’t short. Just like in spot trading, if no one sells, you can’t buy; if no one buys, you can’t sell.
The size of short positions is definitely greater than that of long positions? 🎈
Your size, short size, long size, that is a determining factor, but the direct factor, the direct rise and fall, is not related to your size.
Size, short size, long size represent sizes that have not yet been traded; they are the sizes of hanging orders. They are there, hanging there, predicting whether the price may rise or fall in the future, which has nothing to do with the direct rise and fall at this moment. What you see on the exchange is how many buy orders are hanging below and how many sell orders are hanging above; this is called size.
How the rise and fall of cryptocurrency prices is formed, size is something that hasn’t happened yet. I just mentioned it; for example, in spot trading, how many orders are hanging there to buy. For instance, if the current B price is 1U. Above it are 0.999, 0.998, 0.997, continuing down to zero, how many people have hanging buy orders, this is called long size. If someone hangs orders at 1.001, 1.002 up to 10U, how many orders are hanging there to sell, that is called short size in spot trading.
However, the rise and fall of cryptocurrency prices have nothing to do with the hanging orders; the direct relationship is whether the buyer is anxious or the seller is anxious. The people with hanging orders do not affect the cryptocurrency price; they are just consuming orders. Some people are in a hurry to sell, and I just directly sell your hanging order to you. That causes a slight drop. The buyer is anxious; they are just consuming orders, and the selling order above is consumed, meaning the trading volume is always equal, which leads to a rise. It is these people that decide it, not because there are more long positions or short positions, so whether there are many hanging orders, the price will rise or fall.
B price, remember, B price is determined by those who are anxious, by those who want to buy urgently. Those who are anxious to buy go directly to consume, and those who are anxious to sell go directly to consume from others. The buy orders hanging there are decided by these people.