Long Short Balance

Definition ∞ Long Short Balance represents the relative proportion of open long positions compared to open short positions within a cryptocurrency derivatives market. This metric serves as an indicator of prevailing market sentiment among traders. It reflects directional biases.
Context ∞ Traders and analysts closely monitor the long short balance in perpetual futures and other derivatives markets to gauge the predominant market sentiment. A notable imbalance can suggest the potential for a price squeeze or a shift in market direction. This makes it a frequently cited indicator in cryptocurrency news for predicting short-term price movements.