Quants explained that the historical pattern of Bitcoin’s taker-buy/sell ratio indicator could indicate the best time to start selling the asset.
Bitcoin takers’ buy-sell ratio may reveal selling opportunities
With CryptoQuant’s QuickTake post, analysts discussed the trend of Bitcoin’s “taker buy/sell ratio.” This indicator tracks the ratio of Bitcoin taker buy to taker sell volumes.
If the value of this indicator is greater than 1, the investor is willing to buy the coin at a higher price than it is now. Such a trend means that bullish sentiment is predominant in the market.
On the other hand, the indicator falling below the mark suggests that there may be more selling pressure than current buying pressure in this sector. Therefore, the majority may share a bearish mindset.
Here is a graph showing the trend of the 30-day moving average (MA) Bitcoin taker buy/sell ratio over the past few years.
The 30-day MA value of the metric appears to have been going down in recent days | Source: CryptoQuant
As the chart above shows, the 30-day moving average Bitcoin taker-buy ratio has recently fallen below the 1 level. The quant highlights in the chart the area of the indicator where the 2021 bull market peak will form.
This indicator appears to be below 0.97 during both highs recorded during that bull market. Analysts say these readings signal a stage of market euphoria where smart money can start selling. Still, prices continue to hold up as retail investors continue to have FOMO on the asset.
So far, this indicator has approached the 0.98 level in the recent decline, suggesting that if it follows the pattern of the previous bull market, it has not yet reached the level where the possibility of a ceiling becomes significant. There is.
Bitcoin’s taker-buy ratio can also be used as a buy signal, with the 1.02 level being an important level. But quants note that this indicator is better at indicating overbought markets than pinpointing oversold conditions.
In other news, as an analyst noted, post At X, all Bitcoin investor groups have accumulated a net amount of 95,000 BTC ($6.5 billion at current exchange rates) 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 investor groups are buying up far more Bitcoin than miners are producing. This latest value could also be bullish for the asset, as the chart shows that the recent rally in the asset has been followed by similar levels of accumulation.
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 images from iStock.com, Glassnode.com, CryptoQuant.com, charts from TradingView.com
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