The latest trend in the buy-sell ratio of bitcoin buyers could suggest that a bearish reversal is coming soon for the cryptocurrency.
bitcoin Taker’s 100-day EMA with buy-sell ratio has encountered resistance
An analyst at CryptoQuant Quicktake mail He explained that the asset may be heading towards a correction as the buyer’s bid-sell ratio encounters strong resistance. The “buyer’s bid-sell ratio” is an indicator that tracks the relationship between the buyer’s buying and selling volumes of bitcoin.
When the value of this metric is greater than 1, it means that the buyer’s buying or selling volume is greater than the selling volume at this time. This trend implies that the majority share a bullish sentiment as investors are willing to pay a higher price for the asset.
On the other hand, values below the threshold suggest the predominance of a bearish mentality in the sector, since the selling pressure is greater than the current buying pressure.
Now, here is a chart showing the trend in the 350-day moving average (MA) and 100-day exponential MA (EMA) of the bitcoin buyers’ bid-sell ratio over the past few years:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/11/Is-a-bearish-reversal-coming-for-Bitcoin-This-metric-can.png" alt="bitcoin Taker Buy and Sell Ratio” width=”1280″ height=”534″ loading=”lazy” data-recalc-dims=”1″/>
Looks like the two metrics have crossed each other recently | Source: CryptoQuant
On the chart, the quant has highlighted an interesting pattern that has been repeated for these two averages of the buy-sell ratio of bitcoin buyers over the years. It would seem that every time the 100-day EMA crosses above the 350-day MA, the cryptocurrency price has continued to see bullish momentum shortly.
On the other hand, the opposite type of crossover is usually a bearish predictor for the asset. In addition to these two crossovers, the interaction of the 100-day EMA with the 1 mark has also been relevant for the coin.
The line crossing above the 1 mark, which serves as a boundary between bullish and bearish sentiment regions, has often meant a reversal for the cryptocurrency.
From the chart, it is visible that the type of bullish crossover recently occurred between the 100-day EMA and the 350-day MA of the bitcoin buyers bid-sell index, and what has followed so far has been a strong rally for the asset that has now taken it to the $37,000 level.
The 100-day EMA initially continued its rise after the crossover above the 350-day MA, but the line stopped around the 1 level, implying that it has been encountering resistance.
A break above here would naturally have been another bullish signal for bitcoin, but as the line has failed to go any further so far, a rejection could occur. If such a pattern forms, the asset could see a bearish reversal in the coming days.
btc Price
Once again, bitcoin is challenging the $37,000 level after falling below it over the past day. <img loading="lazy" decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/11/Is-a-bearish-reversal-coming-for-Bitcoin-This-metric-can" alt="bitcoin price chart” width=”1534″ height=”869″/>
btc has observed further uplift in the last few days | Source: BTCUSD on TradingView
Featured image from Shutterstock.com, Charts from TradingView.com, CryptoQuant.com
