Quote from: youbitbrain on September 04, 2018, 05:10:47 PM

Intuitively (for me anyway), a higher number of short positions means there are a larger number of people who feel the price is going to tank. The only reason I can think of to explain why this is a bullish indicator is because for every short position taken, there's someone on the other side of the trade taking a long position(?) But if that's the case, maybe a higher volume of short positions shouldn't really be a bullish or bearish signal, but instead just a signal of price instability(?) Huh

Thanks
-YBB

Where have you seen that correlation?

If there are a lot of short sellers, then it most likely means that prices go down in the short term. The reason these people take out these short positions is that they feel like BTC would go down drastically meaning that they can buy them back later at more favorable price. Even though this might not be completely bearish circumstances, I don't see how this could be bullish, unless a short squeeze occurs.

Anyhow, I think what you mean by shorting in this sense is that prices are going down due to shorters, while the people taking the long positions are doing so when the markets are falling. If that makes sense.