On-chain data shows the Bitcoin taker buy/sell volume is now showing a “buy” signal as the crypto looks to be gearing up for a new rally.
Bitcoin Buyers: Buy/Sell Volume Now Is the Right Time To Buy
An analyst pointed out in a CryptoQuant posting that the BTC Taker Buy Volume recently exceeded a level which has been historically a positive sign for crypto.
The “taker buy volume” is an indicator that measures the long volume of Bitcoin on derivatives exchanges. To calculate this metric, you need to check the order book for buyers. The taker-buy ratio is the volume divided by total volume.
This indicator is considered to be a buyer on the exchanges if its value exceeds 0.50.
However, a ratio lower than this threshold indicates that Bitcoin’s short volume is greater at the moment.
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An alternate indicator is the “taker sell volume,” which measures the total number of sell orders or the short volume.
This chart shows how these indicators have changed over time.
The taker purchase ratio seems to have risen over the last few days. Source: CryptoQuant| Source: CryptoQuant
The graph above shows that the Bitcoin buyer ratio is higher than 0.52 for this week. On the contrary, the ratio of sells has decreased.
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This post explains how the quant uses the value of the indicator to signal a buy for cryptocurrency. Recently, the indicator surpassed this threshold on the 4th of February, triggering a price surge.
It would be an excellent time to buy Bitcoin, if this trend continues.
BTC Prices
At the time of writing, Bitcoin’s price floats around $45k, up 15% in the last seven days. In the past month, crypto’s value has risen 14%.
The chart below shows how the currency’s price has changed over the course of five days.
BTC appears to have surged in the last couple of days. Source: BTCUSD on tradingView| Source: BTCUSD on TradingView
Bitcoin appears to be making a solid recovery after crashing to $34k just last week. The coin is now close to retesting the $45k level.
Currently, it’s unclear whether this recovery will last as the uncertainty due to the Russian invasion of Ukraine still looms over financial markets.
Unsplash.com featured image, Charts from TradingView.com and CryptoQuant.com charts