Longing (Long Position)
A long position (longing) refers to the situation where an investor buys a cryptocurrency or any other financial instrument to sell it later when the price goes high.
What is Longing in Crypto?
Let us suppose you expect Bitcoin’s value to go high for a given time, so you buy it. You are longing Bitcoin.
What does that mean?
It means that you expect Bitcoin to rise in value — a lot. You are expecting a major gain by holding that coin. It is a bullish approach, and professional traders often adopt it when the market is expected to make or continue a bullish move.
It is also practiced in markets belonging to other asset classes, including stocks and securities.
Shorting vs. Longing in Crypto
These two terms reflect the belief of a trader about the rise or fall in the value of a cryptocurrency.
Cryptocurrency trading has some very complex or industry-specific jargon that’s not understood by naive crypto traders. Although shorting and longing are used quite often and aren’t among the most technical terms. Both define the basic elements (activities) on which the whole idea of trading is based.
In a short
position, crypto traders expect a decrease in the price from a given point and sell the cryptocurrency
, they “go short” or hold a short position. On the other hand, when crypto traders expect an increase in the price from a given point
, they buy that coin/token (or “go long
It is possible to go long or short on cryptocurrency using derivatives exchanges without actually buying or selling on spot markets.
Long positions exceed short positions in a bullish market, as crypto traders seek to benefit from price ascension. While you’ll see more short positions when the market is bearish. However, this trend is only an observation. It is quite common for professional traders and investors to buy the dips and sell when the prices go high again. However, these positions, especially in Futures
, impose liquidation
risks on traders. Therefore, it is advised to do research before taking such risks.
When to Open a Long Position?
Ideally, crypto traders should go long when they expect an increase in the price. However, it is important to predict and decide to go long based on technical analysis
done by experts. Traders may also take support of some fundamental analysis
(basics) by being active on social media platforms, engaging in communities of crypto experts, and following crypto news regularly comprehend the market sentiment, and make the final decision.
There are several exchanges and trading platforms where you can go long or short on cryptocurrencies. Apart from spot markets
, you can also hold both long and short positions in Futures markets on multiple crypto trading platforms. One of the most famous trading exchanges is Binance, where millions of traders are involved in such trades on a daily basis.