Coin Glass Tool - The key to understanding the market game

In your cryptocurrency trading journey, understanding market movements is crucial. Coin Glass is an effective data analysis tool that helps you visually monitor investor sentiment. However, just knowing how to use the tool isn’t enough—you need to understand what’s behind the numbers it provides.

Why is a 4x Long to Short ratio a dangerous signal?

When long positions overwhelmingly dominate short positions, you’re witnessing a scenario that market makers favor. If you’re the one controlling the market, would you want the price to go up so all the longs can make money? Of course not. Instead, they will push the price down to trigger stop-loss orders, forcing you to DCA at lower prices. At this point, small traders become liquidity pools that they exploit.

Safe DCA strategies for different types of coins

There are two different scenarios depending on the asset you hold.

For major coins: BTC, ETH, ADA, XRP, and other top cryptocurrencies, if liquidation prices have fallen well below past support levels, you can continue DCA gradually. These coins have strong fundamentals, and over time, the probability of price recovery is high. Currently, a DCA strategy can yield long-term profits.

For speculative coins like meme, AI, NFT, or layer 2 tokens, the situation is entirely different. If you’re holding these coins with thin margins (low leverage) or even high leverage, our recommendation is to exit immediately. These coins largely depend on market trends and sentiment—there’s unlimited risk ahead.

Focus on BTC, ETH—Avoid altcoins

The final advice is simple but effective: only trade BTC and ETH, and steer clear of altcoins if you want to minimize risk. These currencies have deep liquidity, more predictable volatility, and are widely recognized by the market. Once you understand how market makers operate through Coin Glass, you can develop more sustainable trading strategies instead of falling victim to moments of price manipulation.

We hope these insights will help you on your trading journey!