A quant explained that the previous pattern in the Bitcoin borrower buy-sell ratio metric could suggest the best window to start selling the asset.
Bitcoin Taker’s Buy-Sell Ratio Could Reveal Selling Opportunities
In a CryptoQuant summary publishan analyst discussed the Bitcoin trend “borrower’s purchase and sale rate.” This indicator tracks the relationship between the purchase and sale volumes of the Bitcoin borrower.
When the value of this metric is greater than 1, investors are willing to buy coins at a higher price at this time. Such a trend implies that a bullish sentiment is the dominant force in the market.
On the other hand, the indicator below the mark suggests that the selling pressure may be higher than the current buying pressure in the sector. As such, most may share a pessimistic mindset.
Now, here is a chart showing the 30-day moving average (MA) trend of the buy-sell ratio of Bitcoin borrowers 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 Bitcoin MA taker buy-sell ratio recently fell below level 1. The quant highlighted on the chart the region of the metric where the bull run peaks in 2021 have formed.
The indicator appears to fall below 0.97 during both highs recorded in that bull run. According to the analyst, such indicator values suggest the euphoric phase of the market where smart money begins to be sold. Still, prices continue to hold steady as retail investors continue to bet on the asset.
So far, the indicator has approached the 0.98 level in its latest decline, implying that it is not yet at levels where the possibility of a top could become significant if the pattern of the previous bull run is anything to go by.
The Bitcoin taker’s buy-to-sell ratio can also be used as a buying signal, with the 1.02 level being an important level. The quant notes, however, that the metric is better at showing an overbought market than identifying oversold conditions.
In other news, as one analyst pointed out in a publish on X, all groups of Bitcoin investors accumulated a net value of 95,000 BTC ($6.5 billion at the current exchange rate) last month.
The trend in the monthly balance change for all BTC cohorts | Source: @jvs_btc on X
This fast accumulation suggests that Bitcoin investor groups have been purchasing significantly more than miners have produced. The chart shows that a sequence of accumulation of similar levels followed the asset’s recent rally, so the latter could also be bullish for the asset.
BTC Price
At the time of writing, Bitcoin is trading 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 image from iStock.com, Glassnode.com, CryptoQuant.com, chart from TradingView.com
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