Here we see that btcusdlongs/btcusdshorts gets a huge spike upwards while bitcoin itself is going down.
Similar to , this is a classic divergence that shows that people don't feel safe holding shorts any longer and/or want to go long and catch the bottom.
With a btc/usd overlay it's very easy to see how during previous btc bottoms, btcusdlongs/shorts gets a huge spike and soon after btc/usd rebounds as well.
Another tool i like to use is the cm williams vix fix that finds market bottoms by itself, just make sure to use it on multiple larger time frames to confirm the absolute bottom.
I use it mostly on the four hour chart, and make sure to check the hourly for confirmation.
If both of them look completely bottomed out and overextended downwards, that gives me a very strong buy signal and confidence to buy during long red streaks.
I dont use it on the longs/shorts chart but rather on the actual usd price chart, just kept it there on this chart for others to see what it's called and how it looks.
hope that helps :)
It's very useful for occasions where something seems to be crashing and looks like a good buy, but the indicator is still grey with medium bars indicating a possible bull trap and then crash continuation.
Sometimes there is noise but once you see a couple tall greens on the 1h/4h chart, along with high volume and parabolic movement or a compressed-spring like movement, it should be a solid bottom more than 75% of the time, and i'm content with those odds.
I think its a good indicator but needs imporvement or using it with other ones for better results.