What is the difference between short float and short ratio in the cryptocurrency market?

1 answers

• Muhammed arif AAug 02, 2024 · a year ago
  Short float and short ratio are two key metrics used in the cryptocurrency market to assess market sentiment and potential price movements. Short float represents the percentage of a cryptocurrency's total supply that is currently being held by short sellers. It reflects the level of bearish sentiment in the market, as short sellers are betting on the price of the cryptocurrency to decline. A high short float suggests that many investors anticipate a price drop, while a low short float indicates more bullish sentiment. On the other hand, short ratio is the number of days it would take for short sellers to cover their positions based on the average daily trading volume. It provides an estimate of how long it would take for short sellers to repurchase the borrowed shares, which could potentially trigger a short squeeze if the price starts to rise. Both short float and short ratio offer valuable insights into market sentiment and can help traders and investors make informed decisions in the cryptocurrency market.
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