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The Lab

Ideas traders use, put to the record · updated 30 Oct 2026 21:56 UTC

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#2 Fade the crowd Partly

The idea

When unusually many traders are long, few are left to buy: the crowd is late, and the price tends to fall.

Why test it

A classic contrarian rule. Exchanges publish the long/short ratio and many traders watch it.

What we tested

Every hour: Binance's long/short ratio of all its accounts, compared with the coin's own last 30 days, so a coin that always leans long doesn't count, only an unusual lean. Against: the price change over the next 24 hours (positions build and unwind over days). Data: Binance's archive, hourly, since 2022; 32 coins, 1,104,571 coin-hours.

Record tested: 19 Jan 2022 – 30 Oct 2026 · first run: 12 Oct 2026 · numbers as of: 30 Oct 2026 03:21 UTC, updated every hour.

What we found

Partly. More than chance, as the idea says, but it does not pass every test. Failed: the same in most coins; the same every year. After the hours leaning most long, the next 24 hours went 36.5 bps worse than after the hours leaning least long: $36 on every $10,000.

+23.8+6.1-7.8-9.3-12.7← leaning least longleaning most long →

Every hour of every coin sorted into five equal groups by the signal, low to high, and the average move over the next 24 hours after each group, in basis points (0.01%) above or below the average move. If the idea were right, the bars would fall from left to right.

How sure

What could still be wrong

Binance's accounts are not the whole market. Next-day moves overlap hour to hour, so the record holds fewer independent answers than its hours suggest.

All the numbers

By year · mean rank correlation

-0.024
2022
-0.027
2023
-0.014
2024
-0.018
2025
+0.001
2026

Other settings · mean rank correlation

next hournext 4 hoursnext 24 hours
mean rank corr.+0.005
t +4.5
-0.001
t -0.5
-0.013
t -3.3

The test above is the next 24 hours; these are the other horizons. With several tries one will look good by luck, so all are shown.

By coin · rank correlation

coinrank corr.
HYPE+0.052
GRASS+0.018
LTC+0.014
UNI+0.014
TIA+0.008
WLD+0.006
STRK+0.005
ETH+0.005
ZRO+0.004
W+0.003
SUI+0.002
XRP-0.007
MAGIC-0.011
DOGE-0.013
ENA-0.013
BTC-0.018
AAVE-0.018
LINK-0.020
APT-0.020
AVAX-0.021
ONDO-0.022
FIL-0.025
ARB-0.026
TAO-0.027
NEAR-0.027
ADA-0.032
S-0.034
DOT-0.037
INJ-0.042
SOL-0.045
ZEC-0.048
RSR-0.051

Update, 27 October 2026: where the idea comes from

Added after this page was published. The study above is left as it was.

Credits

← Order-book pressureFollow the top traders →

How to read a study: the maths, step by step

1. Basis points (bps). A hundredth of a percent: 100 bps is 1%. 10 bps on $10,000 is $10. Buying and selling once (a round trip) at typical fees costs about 10 bps, so an effect smaller than that loses money.

2. The five groups (fifths). Take every hour of every coin and sort them by the signal, lowest to highest. Cut the pile into five equal groups. For each group, average the price move that followed. Each bar shows its group's move above or below the average of all hours, so a market that simply rose all month doesn't count. If the idea is right, the bars climb (or fall) steadily from one end to the other.

3. Rank correlation (Spearman's). One number for "when the signal is higher, is the move after higher too?" Put the hours in order by the signal (1st, 2nd, 3rd…), and again by the move that followed, then compare the two orders. Five hours in exactly the same order in both give +1; exactly reversed, −1; no pattern, about 0. Markets are noisy, so real effects are tiny: 0.03 held for years is notable. We work it out for each coin, then take the average over the coins.

4. t: more than luck? Even with no real link, an average comes out a little above or below zero by chance. How much it usually wobbles (the standard error) can be worked out from how much the coins disagree with each other. t is the average divided by that wobble. For example, an average of 0.02 with a usual wobble of 0.005 gives t = 4: four times what luck usually makes. Luck alone passes ±2 about 1 time in 20, and ±3 only a few times in 1,000. We ask for ±3, because coins move together and neighbouring hours overlap, which makes luck look surer than it is.

5. "The price bouncing back" taken out. Some signals mostly echo the price's last move: a fall, then a bounce. We remove what that last move already explains and check that what is left still lines up with the move after, with t still beyond ±3.

6. Many settings tried. Try twenty settings and one will look good by luck, so every setting tried is shown under "All the numbers", not only the best.

7. Old data and new data. The settings tested (distances, horizons, thresholds) were set on 12 Oct 2026, after a first look at the numbers (a study added later gives its own dates). The record from 13 Oct 2026 on was unseen when they were chosen, so it is the fair test: each study judges it apart, as "holds on new data", once there is enough of it.

The verdicts. Holds up: every test passed. Real, but small: every test passed but one: the effect is too small to pay for a trade's costs. Partly: more than chance, but some tests failed. A hint: t beyond ±2 but not ±3: perhaps something, perhaps luck. No sign: nothing the record can tell from chance. Too early: under 2 weeks of record. No reliable edge: a write-up's word: what looked good did not hold up against chance or on unseen data. No edge after fees: a write-up's word: there is something, but trading costs eat it. Not shown: a write-up's word: the record could not show that the idea helps. Passed, on a weak bar: a write-up's word: it cleared the bar set in advance, but the bar proved easy; the stricter reading, added after, is shown apart. No reliable gain: a write-up's word: the versions that looked better did not clear the bar set in advance: all three coins, at both a day and a week. Failed on fresh data: a write-up's word: a lead from one study, tested again on prices kept apart, did not hold. Not proven, a lead: a write-up's word: it failed the test set in advance, but pointed the same way throughout; worth a fresh test. Holds, with the coins paid for: a write-up's word: it held up through every test, but only as set out: the coins bought outright, nothing borrowed. Not confirmed; the lead holds: a write-up's word: on fresh data it fell just short of the bar set in advance, but still pointed the same way.

21 Oct 2026 · Correction: Binance's readings of 15 Oct 2026, 11:00 to 14:55 UTC, were wrong (frozen, halved or zero on every coin, in Binance's own archive too). They are now left out as missing, and the nine studies from the years were worked out again. No verdict changed. Some figures moved slightly, the most: #5's gap from 19.4 to 19.1 bps; #9 from 28 to 27 of 32 coins pointing the same way (the bar is 70%); #4's gap from +0.1 bps to about none. The "so far" figures on the new record moved more, as 15 Oct is one of its eight days.

Historical data: Binance Vision (data.binance.vision), used under CC BY-NC-SA 4.0 (creativecommons.org/licenses/by-nc-sa/4.0); what is drawn from it here is shared under the same licence.

Educational research from public market data; any trading discussed is paper, never real. Nothing here is advice. The full notice.