A quant has explained that the past pattern in the Bitcoin taker buy-sell ratio metric may suggest the best window to start selling the asset.
Bitcoin Taker Buy Sell Ratio May Reveal Selling Opportunities
In a CryptoQuant Quicktake post, an analyst discussed the trend in the Bitcoin “taker buy sell ratio.” This indicator keeps track of the ratio between the Bitcoin taker buy and taker sell volumes.
When the value of this metric is greater than 1, the investors are willing to purchase coins at a higher price right now. Such a trend implies a bullish sentiment is the dominant force in the market.
On the other hand, the indicator being under the mark suggests the selling pressure may be higher than the current buying pressure in the sector. As such, the majority may share a bearish mentality.
Now, here is a chart that shows the trend in the 30-day moving average (MA) Bitcoin taker buy-sell ratio over the last few years:
The 30-day MA value of the metric appears to have been going down in recent days | Source: CryptoQuant
As the above graph shows, the 30-day MA Bitcoin taker buy-sell ratio has recently fallen below the 1 level. The quant has highlighted in the chart the region of the metric where the bull run peaks in 2021 formed.
The indicator would appear to dip below 0.97 during both the heights registered in that bull run. According to the analyst, such indicator values suggest the euphoria phase of the market where the smart money starts to sell. Still, the prices continue to hold on as the retail investors continue to FOMO into the asset.
So far, the indicator has approached the 0.98 level in its latest decline, implying that it’s not yet at the levels where the possibility of a top might become significant if the pattern of the previous bull run is anything to go by.
The Bitcoin taker buy sell ratio may also be used as a buying signal, with the 1.02 level being an important level. The quant notes, however, that the metric is better at showing an overbought market than it is for pinpointing oversold conditions.
In other news, as an analyst pointed out in a post on X, all the Bitcoin investor groups have accumulated a net amount of 95,000 BTC ($6.5 billion at the current exchange rate) over the past month.
The trend in the monthly balance change for all BTC cohorts | Source: @jvs_btc on X
This rapid accumulation suggests that the Bitcoin investor groups have been buying up significantly more than the miners have produced. The chart shows that an accumulation streak of similar levels followed the recent rally in the asset, so this latest one can also be bullish for the asset.
BTC Price
At the time of writing, Bitcoin is trading at around $68,600, up more than 3% over the past week.
Looks like the price of the coin has registered a sharp drop in the past 24 hours | Source: BTCUSD on TradingView
Featured image from iStock.com, Glassnode.com, CryptoQuant.com, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
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Author: Keshav Verma
