Crowded Long vs Crowded Short

A market condition in which an excessive proportion of leveraged participants are positioned long, typically indicated by a long/short ratio above 1.8 and an annualized funding rate above 30%; associated with elevated fragility as the pool of new buyers diminishes.

A market condition in which an excessive proportion of leveraged participants are positioned short, typically indicated by a long/short ratio below 0.7 and negative funding; associated with elevated short squeeze risk as shorts face mounting carry costs on positions that are not being rewarded.