Typically, traders go skeptical afterward Bitcoin (BTC) "completes" a strong performance like the stellar motility from $12,000 to $15,950 seen over the by few weeks.

The 35% gain over the by thirty days led some traders to conclude that BTC is over-extended and in need of a pullback. On the other hand, there are enough of traders who are confident that the current bull run tin go along.

Generally, the market place is displaying mixed signals as Bitcoin price fluctuates between $xv,000 to $16,000, so many traders are left to rely on their bias to confirm their investment decisions, and this is a dangerous place to be.

Crypto Fear and Greed Index (Daily). Source: Digital Assets Data

Take, for example, the Crypto Fearfulness and Greed Index, which currently displays 90, a reflection of "90, Extreme Greed." Many traders countertrade the index when it shows polar extremes, meaning "extreme greed" is a indicate to take profits or go brusk, equally information technology normally "means the marketplace is due for a correction," according to the webpage.

Adding to this, both on-chain and crypto exchange outflow data has led annotator Willy Woo to conclude that "a blow-off acme is unlikely to happen." To settle this information dispute, an investor could take a closer look at exchanges of meridian clients (or summit traders) long-to-short ratio.

Binance BTC top traders long-to-short ratio. Source: Binance

Take notice how top traders at Binance take been reacting after Bitcoin's movements. The chart suggests traders are responding to toll it rather than trying to predict it. One should expect this movement from more than novice traders who purchase the local tops and sell the dips.

It is worth noting that each exchange treats meridian traders' data differently, as there are multiple ways to measure out clients' net exposure using derivatives. Therefore, whatsoever comparison betwixt different providers should be made on percentage changes instead of absolute numbers.

Interestingly, OKEx information shows a different approach by top traders every bit Bitcoin rallied above $15,800. Instead of blindly following cost movements, those investors seem to be waiting up to two days before changing their strategy.

OKEx BTC top traders long-to-brusque ratio. Source: OKEx

Although, this strategy seems smarter, at offset sight, adding long positions equally Bitcoin failed to sustain the $xv,600 level. In that location seems to exist less desperation compared with the reactive behavior of Binance traders. Despite this, in that location however are no signs of conviction in OKEx long-to-short positioning.

Sometimes the best trade is to not trade at all

Regardless of the success rate of these strategies, the long-to-short ratio at both exchanges shows traders do not feel also confident about Bitcoin'south electric current toll action. Although both seem to be currently sitting at a slightly net long position, their stance changes every bit the market sentiment moves.

When facing mixed signals, traders should avoid trying to observe further evidence to corroborate their views. Doing nothing sometimes is the best conclusion one can make, specially when even pro traders seem to be changing their positions after small tendency changes.

On-concatenation assay, exchanges' net flows, and indicators such as the Fearfulness and Greed Alphabetize are useful. Nevertheless, they should not be excluded from one's assay when providing conflicting messages.

The views and opinions expressed here are solely those of the autho r and practice not necessarily reverberate the views of Cointelegraph. Every investment and trading move involves take chances. You should comport your own inquiry when making a decision.