On-chain data shows the Bitcoin taker buy-sell ratio has rebounded back into the “hold” zone after touching the selling level.
Recent Uplift in Bitcoin-Taker Buy/Sell Ratio
In a CryptoQuant article, an analyst explained that taker buy-sell ratio might be indicative of where BTC will go next.
The “taker buy-sell ratio” is an indicator that measures the ratio between the Bitcoin buy volume and the sell volume.
If this metric’s value is greater than one, then it indicates that the current long volume exceeds the present sell volume. If this trend is evident, it means that market sentiment right now is bullish.
However, ratios below 1 indicate that investors are bearish at the moment.
Here’s a chart showing the Bitcoin Taker Buy-Sell Volume Trend over the past couple years.
Source: CryptoQuant| Source: CryptoQuant
You can see that the quant divided the Bitcoin Taker Buy-Sell ratio into three distinct zones in the graph.
The analyst believes it’s best to buy BTC when the indicator is in the green zone, and to sell during periods of the red region.
Related Reading: Bitcoin Holders Cause Largest Capitulation in Its History. Bearish Horizon For BTC| Bitcoin Holders Trigger Largest Capitulation In Its History, Bearish Horizon For BTC?
The yellow portion between these two is the “hold zone,” where holding until the metric touches the upper red level can be the ideal course of action.
The indicator dropped recently and reached this higher sell level. Since then, the indicator has risen a lot instead of falling further into the red zone.
This formation was observed only a handful of times over the past two years. The analyst highlighted them with a purple box.
Bitcoin Price Continues Struggle, But Miners Refuse To Sell| Bitcoin Price Continues Struggle, But Miners Refuse To Sell
This trend seems to have occurred twice before, and the Bitcoin price experienced an uptrend within a few days.
If this happens again, then the quant thinks that crypto will see another rebound in this or next month.
It is worth noting that this Bitcoin taker/buy/sell ratio formation occurred in the early 2020s, and then, however, it was followed by a crash.
BTC Prices
At the time of writing, Bitcoin’s price floats around $38.3k, down 4% in the last week. Below is a chart showing the change in price over the last five days.
The price of Bitcoin seems to have shifted sideways in the past few days. Source: BTCUSD at TradingView| Source: BTCUSD on TradingView
Unsplash.com featured image, Charts from TradingView.com and CryptoQuant.com charts
