Long and short positions

Going long means buying an asset because you expect its price to rise. Going short means profiting if the price falls. These are the two basic directions of any trade.

In spot crypto, being long is simple: buy and hold. Shorting is more involved. On a margin market you borrow coins and sell them, hoping to buy them back cheaper later and return them. On futures and perpetual markets you simply open a short contract. Traders also go short to hedge, for example to protect the value of coins they intend to keep.

The risks are not symmetric. A long position can lose at most 100% of what you invested, unless leverage is involved. A short position has theoretically unlimited losses, because prices can keep rising, and shorts in crowded markets can be hit by a short squeeze. The "long/short ratio" shown on some exchanges summarises how traders are positioned, but it is a rough sentiment signal at best.