Just when traders thought October’s ETF pump was slowing down, Bitcoin sent a loud and clear bullish metric on the chart. According to on-chain data, a metric known as the Take Buy Sell Ratio has started to climb, painting a picture of confidence that was seen during investors’ accumulation after the price dip caused by FTX’s crash last November. This suggests growing buying sentiment for Bitcoin, creating surging opportunities above the crucial $35K mark.Â
Investors Find $35K As Accumulation Point
Bitcoin’s “taker buy-sell ratio,” a key market indicator, has shown a notable increase across various cryptocurrency exchanges, hinting at a resurgent optimistic market trend with Bitcoin hovering around the $34K-$35K mark.Â
This ratio hit a peak above 1, marking its second-highest position in over a year, as per the analytics provided by the South Korean blockchain analysis company CryptoQuant. A value exceeding 1 suggests that the buying volume by active order placers, or “takers,” is surpassing the selling volume, which is often interpreted as a bullish signal within the trading circles.
The Take Buy Sell Ratio, having rebounded from its previous slump during the November-December 2022 period, is exhibiting a comparable upward trajectory currently. A surge in market buy orders amidst a typically bearish sentiment toward Bitcoin often forecasts a potential trend reversal to the upside. At present, the prevalence of market buy orders for Bitcoin mirrors the patterns observed in January 2023.
This suggests that investors were lured due to the market dip caused by FTX’s crash last year, and hence, the market went on an upward trajectory in the following months. This trend is back again as investors see $35K as an exciting entry point to secure massive gains in the upcoming months ahead of the ETF launch and BTC halving event.
Bitcoin’s Price Is Not Inflated
Numerous traders suggest that the remarkable doubling in Bitcoin’s value this year, fueled primarily by the October ETF hype, might be approaching its peak as the initial thrill declines. Despite a swath of investors cashing out to capitalize on profits, on-chain metrics signal room for further expansion. With the MVRV ratio not yet touching its threshold of concern, it suggests that Bitcoin’s current $35K price tag is not overstretched, pointing to the likelihood of sustained buyer interest in the weeks ahead.
Bitcoin’s recent attempts to surge above the $35K price barrier have been met with significant pushback from sellers. However, with the Market Value to Realized Value (MVRV) ratio indicating that Bitcoin is more than 50% shy of being deemed overvalued, upcoming weeks could bring in some noteworthy price movements.
Data from CryptoQuant shows the current MVRV ratio at 1.67, well beneath the 3.5 threshold that traditionally points to substantial market tops. This suggests that, even though Bitcoin has achieved new highs for the year, its valuation isn’t as stretched as it has been during previous market rallies.
Market capitalization is the aggregate value of the circulating supply, calculated using the average price on major exchanges. Conversely, the realized value is often regarded as a truer representation of Bitcoin’s value, calculating the aggregate price paid for all existing Bitcoins by summing the market value at each coin’s last on-chain movement.
Extremely high MVRV values can suggest that Bitcoin’s market price may be overinflated relative to its ‘actual’ or realized value, whereas notably low values could imply the converse.
