On-chain data shows that the buy/sell ratio of bitcoin takers has recently risen above ‘1’, a sign that the crypto may be experiencing a short-term bullish momentum.
The buy/sell ratio for bitcoin is 1. rises above the value of
As explained by an analyst in a Cryptoquant post, the current BTC buy/sell ratio trend could suggest that the crypto could see sideways movement or a bullish reversal in the short term.
The “taker buy/sell ratio” is an indicator that tells us about the ratio between long and short volumes in the bitcoin futures market.
When the value of this metric is greater than one, it means that the longer volume is more effective at the moment. Such a trend suggests that the general sentiment is bullish right now.
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On the other hand, a value of the indicator below this means that the selling pressure is currently stronger than the buying pressure in the bitcoin market.
Now, here is a chart that shows the trend in the BTC 50-day moving average taker buy/sell ratio over the past year:
Looks like the value of the metric has surged up in recent weeks | Source: CryptoQuant
As you can see in the above graph, the volume marked the relevant points of the trend for the buy/sell ratio of the bitcoin taker.
It seems that whenever the indicator has fallen below the value of one, the price of the coin has soon seen a bearish trend.
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Similarly, crossing ratios on a line are usually followed by a bullish reversal or sideways movement for crypto.
In recent weeks, the buy/sell ratio has seen a rebound in value and has now crossed the “one” range.
If the previous trend is anything to go by, it could mean that either a temporary bullish reversal or a sideways movement in store could be in store for Bitcoin in the near future.
At the time of writing, bitcoin price is swimming around $20.5k, up 2% over the past seven days. In the past month, crypto has lost 31% in value.
The chart below shows the coin’s price trend over the past five days.
The value of the crypto seems to have shot up over the past day | Source: BTCUSD on TradingView
Bitcoin has been consolidating mostly sideways over the past few days. However, in the last twenty four hours, it seems that there has been some increase in the value of the coin as it has now again broken above the $20k mark.
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com