Definition ∞ Trader positioning refers to the collective stance or exposure of market participants in a particular asset, indicating whether they are predominantly holding long (buy) or short (sell) positions. In cryptocurrency markets, this data can offer insights into market sentiment and potential future price movements. Analyzing trader positioning helps assess market conviction and potential volatility. It is a key indicator for market health.
Context ∞ Trader positioning is a closely watched metric in cryptocurrency news and market analysis, often influencing short-term price predictions. Reports frequently discuss whether retail or institutional traders are leaning bullish or bearish on specific digital assets. Significant shifts in positioning can signal impending price reversals or continuations. Understanding this concept is crucial for interpreting market sentiment.
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