(Read the related idea in the link below if you want to learn more about the ratio and don't forget to like and comment as it helps me to understand if you appreciate my contents and what to focus on)
So, starting from the main chart, we see the long position lying in the range 22k-36k, with values outside this band as extremes quickly absorbed and with the turquoise band to separate the bull from the bear market expectations.
The times we broke on the DOWNSIDE, were mainly because of cash in of profits (indeed you see the first extreme was in dec17 when the btc price hit the ath at 20k, and the second in may 2019, when btc started to rally from 4k to 14k: why close a position at the beginning of a rally? If you look at btcshorts index you will see that rally was not trusted by investors who used the rebounce to take the chance to close their positions. Let's not forget we were coming from a more than 1 year bear market and bulls were exhausted).
Break on the UPSIDE instead happened in a very constant way because of an attempt by the traders to position themselves long before the halving event.
Now we are back to more normal values but still in the Bull Market Expectation range. As you can see, some long positions were closed during this rally, so the index still has some room to grow. This indicates a LONG
(looking at the short chart bring us to the same conclusion-> shorts were closed more than opened during this rally, meaning that the market expects it to continue)
Now lets take a look at the long/short ratio which gives back a value of 4.7, meaning that for each short position, 4.7 long positions are opened. Every time it topped was exactly before a drop of the market, even if with time the range has changed over time. From a 0.5-3 range (that signals a kind of uncertainty in the market, because the market actors position swing from 0.5 which means a 2x1 ratio of short-long positions to a 3x1 ratio of long-short positions) to a 2-5 range: even without considering the extremes at 10, the market from mid 2019 (one year before the halving) is definitely skewed towards long positions. That is why we should not expect a return to values of the previous range, but rather in this phase we can consider the value of 2 as a starting point for another run. The question is: should we consider a value of 5 as the top before the next drop or will we go to 10 again?
Unlucklily, both charts were not in existance in2016 so we can not compare their behaviour with the previous halving.