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Bitcoin Taker’s buy/sell ratio cannot provide clear signals as demand remains low

On-chain data shows that the buy/sell ratio of Bitcoin Taker hasn’t been able to give any real signal lately as demand in the market has remained low.

Bitcoin Taker’s buy/sell ratio has failed to gain momentum lately

As highlighted by an analyst in a CryptoQuant post, the taker’s buy/sell ratio has not moved significantly above or below 1 since August 2022. The “Bitcoin Taker Buy/Sell Ratio” is an indicator that measures the ratio between the taker’s purchase volume and the taker’s sell volume.

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

On the other hand, values ​​of the indicator below the threshold suggest that the buyer’s selling volume is currently more dominant. Such readings imply bearish sentiment, which is currently shared by the majority of investors.

Of course, if the ratio is exactly equal to one, it means that the buy and sell volumes of the buyers are exactly equal at the moment and hence the market is evenly split between bullish and bearish mentality.

Now here is a chart showing the trend of the 14-day simple moving average (SMA) buy/sell ratio of bitcoin takers over the past few years:

Bitcoin Taker’s buy/sell ratio cannot provide clear signals as demand remains low, Crypto Trading News

The 14-day SMA of the metric appears to be near 1 at the moment | Source: CryptoQuant

As you can see in the chart above, the quant has marked the relevant points of the trend for the 14-day SMA Bitcoin Taker Buy/Sell Ratio. It looks like BTC witnessed some bullish momentum shortly after when the indicator crossed the 1.03 level.

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

The bullish signal was last seen in July 2022 as the crypto moved towards its first bear market recovery rally. Since then, however, there have been no further breaches of these levels, as can be seen from the chart.

In the time between then and now, the taker’s buy/sell ratio has fluctuated around 1, but the metric just couldn’t gather enough momentum to go all the way in either direction. “We cannot expect bitcoin to move much until confidence – and therefore demand – returns to the market,” the analyst explains.

BTC price

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

Bitcoin Taker’s buy/sell ratio cannot provide clear signals as demand remains low, Crypto Trading News

It looks like the value of the crypto has seen a small spike in the last 24 hours | Source: BTCUSD on TradingView Featured image by Kanchanara on Unsplash.com, charts by TradingView.com, CryptoQuant.com

Source: Crypto News Deutsch

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