On-chain data shows that Bitcoin buyers’ buy/sell ratio recently exceeded ‘1’, an indication that the cryptocurrency may see upward momentum in the short term.
Bitcoin Taker buy/sell ratio rises above 1
As explained by an analyst at CryptoQuant MailThe current trend of the BTC buying/selling ratio may indicate that the cryptocurrency may see a sideways movement or a bullish reversal in the short term.
The “Trader’s buy/sell ratio“It is an indicator that tells us about the ratio between long and short volumes in the Bitcoin futures market.
When the value of this scale is greater than one, it means that the long scale is dominant at the moment. This trend indicates that the general sentiment is bullish at the moment.
On the other hand, an index value lower than that indicates that selling pressure is currently stronger than buying pressure in the bitcoin market.
Now, here is a chart showing the trend in the buy/sell rate of the 50-day moving average of BTC 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 chart, quantitatively identify relevant trend points for the bitcoin buy/sell ratio.
It seems that whenever the indicator drops below one value, the price of the coin notices a downtrend soon after.
Likewise, a ratio crossing above one line usually follows a bullish reversal or sideways movement of the cryptocurrency.
In recent weeks, the value of the buyer’s buy/sell ratio has once again noticed an uptick and has now crossed the “one” threshold.
If the past trend is anything to go by, this could mean that Bitcoin could have either a temporary bullish reversal or a sideways movement in the store in the near future.
At the time of writing this report, Bitcoin price It is floating around $20.5K, up 2% in the past seven days. Over the past month, the cryptocurrency has lost 31% of its value.
The chart below shows the currency 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
Over the past few days, Bitcoin has been mostly sideways consolidating. However, in the past 24 hours or so, the value of the coin appears to have gained some bullish momentum as it has now broken above the $20,000 mark again.
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com