Bitcoin Taker Buy/Sell Ratio’s January Pattern Repeats, Rally Ahead?

On-chain data shows that the Bitcoin taker buy/sell ratio has observed a large spike. The last time this happened was in January before the rally began.

Bitcoin Taker Buy/Sell Ratio Has Registered A Spike Recently

As pointed out by an analyst in a CryptoQuant post, the taker buy/sell ratio for two exchanges, in particular, has seen some very high values recently. The “taker buy/sell ratio” here is an indicator that measures the ratio between the Bitcoin taker buy and taker sell volumes on a specific exchange.

When the value of this metric is greater than 1, it means that the taker buy volume is greater than the taker sell volume on the exchange in question right now. During such conditions, there are more buyers willing to buy BTC at a higher price on the platform.

On the other hand, the indicator being less than this threshold implies the majority of the traders on the exchange are holding a bearish sentiment as the selling volume is higher than the buying volume at the moment.

Now, in the context of the current discussion, the Bitcoin taker buy/sell ratio of two exchanges is of interest: Huobi Global and BitMEX.

First, here is a chart that shows the trend in the 14-day simple moving average (SMA) of the indicator for Huobi Global over the past few months:

As displayed in the above graph, the 14-day SMA value of the Bitcoin taker buy/sell ratio for the Huobi Global exchange has seen quite high values recently. This implies that buying pressure on the platform has possibly been elevated.

Interestingly, as the quant has highlighted in the chart, similar spikes were also observed back during December-January. It would appear that back then the whales had been aggressively buying at those lows, and this buying pressure eventually paved the way for the rally in January.

A similar pattern has also appeared for the BitMEX platform, as the indicator has spiked to values of a similar scale as those seen in January.

The high buy volumes on both these platforms have appeared as the price of the cryptocurrency has been struggling recently. This could be a sign that the whales think that the recent lows have been ideal accumulation opportunities.

According to the analyst, “a specific whale that heavily intervened at the January bottom is strongly intervening in this recent short-term price movement.”

The quant notes that as the trading volume (that is, the total amount of Bitcoin that’s being transacted on these platforms) is low at the moment, movements of specific whales can hold greater influence.

Naturally, if the current situation truly is similar to the accumulation period at the December-January lows, then Bitcoin may be gearing up for another rally soon.

BTC Price

At the time of writing, Bitcoin is trading around $29,500, up 1% in the last week.