Bitcoin Taker Buy/Sell Ratio Can’t Give Any Clear Signals As Demand Remains Low

Keshav Verma

2 years ago

3 mins read

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On-chain data shows the Bitcoin taker buy/sell ratio has been unable to give any real signal recently as the demand has remained low in the market.

Bitcoin Taker Buy/Sell Ratio Hasn’t Been Able To Catch Any Momentum Recently

As pointed out by an analyst in a CryptoQuant post, the taker buy/sell ratio hasn’t moved much above or below 1 since August 2022. The “Bitcoin taker buy/sell ratio” is an indicator that measures the ratio between the taker buy volume and the taker sell volume.

When the value of this metric is greater than one, it means the buy or the “long” volume is higher in the market right now. Basically, this means that there are more buyers willing to purchase BTC at a higher price currently, and thus the buying pressure is stronger.

On the other hand, values of the indicator under the threshold suggest the taker sell volume is more dominant at the moment. Such values imply a bearish sentiment is shared by the majority of the investors currently.

Naturally, the ratio being exactly equal to one indicates the taker buy and taker sell volumes are exactly equal right now, and therefore the market is evenly split between bullish and bearish mentalities.

Now, here is a chart that shows the trend in the 14-day simple moving average (SMA) Bitcoin taker buy/sell ratio over the last few years:

The 14-day SMA value of the metric seems to be close to 1 at the moment | Source: CryptoQuant

As you can see in the above graph, the quant has marked the relevant points of the trend for the 14-day SMA Bitcoin taker buy/sell ratio. It looks like whenever the indicator has crossed the 1.03 level, BTC has observed some bullish momentum shortly after.

On the contrary, whenever the ratio dipped below the 0.97 level, a bearish trend followed the crypto’s price. The last time this signal formed was back in April 2022, before the market observed the LUNA and 3AC collapses.

The bullish signal was last seen in July 2022, as the crypto built up towards its first relief rally of the bear market. Since then, however, there have been no other breaches of either of these levels, as is apparent from the chart.

In the period between then and now, the taker buy/sell ratio has been oscillating around 1, but the metric has just not been able to summon enough momentum to go all the way in either direction. “We cannot anticipate Bitcoin to move much as long as confidence – and subsequently demand – does not return to the market,” explains the analyst.

BTC Price

At the time of writing, Bitcoin is trading around $16,700, down 1% in the last week.

Looks like the value of the crypto has observed a small surge in the last 24 hours | Source: BTCUSD on TradingView

Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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