As Ethereum Approaches $4k, On-chain Data Shows Rally Will Continue Even Higher

Keshav Verma

3 years ago

3 mins read

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Even with Ethereum’s strong run where the coin has reached near $4k, on-chain data shows there is still more room for the bull rally to continue.

Ethereum All Exchanges Taker Buy Sell Ratio Shoots Up

As pointed out by a CryptoQuant post, the ETH all exchanges taker buy sell volume has shown a huge spike today.

The Ethereum all exchanges taker buy sell ratio (or volume) is an indicator that shows the ratio between long volume and the taker seller volume.

Now, common sense says, since every trade needs a buyer and a seller, how can there exist a difference between the two quantities?

Well, to understand the concept of taker buy and sell volumes, the idea of taker and maker needs to be understood first. Quoting the CryptoQuant data guide:

Taker: Taker trade refers to an order that is traded before going on the order book. All market order trades are takers.

Maker: Maker trade refers to an order that goes on the order book (e.g. a limit order). These orders add volume to the order book, helping to ‘make the market’.

When these takers buy ETH at the price set by makers, the amount of coins traded contributes to the taker seller volume. This volume is referred to as “seller” because it can drive the prices down.

On the other hand, takers selling to makers at the ask price can push the prices up, thus contributing to the buyer volume.

The ratio between these two volumes is precisely the taker buy-sell ratio. If the taker buy volume is higher than the sell volume (that is, the value of indicator is above one), it means more trades are occurring at the ask price. This shows there is more demand and so the prices go up.

Now, here is a chart that shows how the value of this metric looks like for Ethereum right now:

The ETH metric spikes up | Source: CrytpoQuant

A high value of the indicator such as right now suggests the Ethereum taker buy volume is greatly overwhelming the sell volume.

A similar spike was seen in the middle of August, and the price moved up in response. So, if the indicator is to be believed, the current high value might also result in further movement upwards.

ETH Price

At the time of writing, Ethereum floats just under $4k, up 22% in the last seven days. Monthly gains for the coin are around 47%.

The below chart shows the trends in ETH’s value over the last three months.

Ethereum's price very sharply moves up as the crypto aims to test $4k | Source: ETHUSD on TradingView

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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