The Sell-Side Risk Ratio measures the volume of realized profits and losses by Bitcoin ($BTC) investors compared to the size of the asset. According to crypto analyst Axel Adler Jr this ratio depends on the Realized Cap that measures Bitcoin circulation.
Decrease in Bitcoin Sell-Side Risk Ratio Points to Lower Volatility
When individuals exchange Bitcoin for profits or losses that are big compared to their buy price, that shows up in the Sell-Side Risk Ratio. Higher market fluctuations cause investors to sell their Bitcoin holdings. The Bitcoin market needs to reach a stable point in its cycle. Axel states that small ratios show Bitcoin owners sell their coins close to their investment values. Market stability is established when traders have made their gains or losses already. When values are low, Bitcoin tends to be less volatile.
The number of buyers selling Bitcoin in recent weeks has greatly decreased. The percentage of $BTC traders selling at breakeven points has decreased strongly. The ratio change proves most people who traded Bitcoin have sold or bought back their digital assets already.
Bitcoin Sell-Side Risk Ratio Drop Points to Future Price Swings
The current ratio for Bitcoin remains higher than what it has been in the past. The $BTC market is slowing down based on how much fewer investors are selling their holdings. He also predicts that the market is making space for another round of big price swings.
Lastly, how much traders sell $BTC helps us see where the market stands. According to Axel Adler Jr the falling ratio indicates that less people are deciding to sell their Bitcoins. The market is currently calm, but can expect a new period of price swings and wild price fluctuations in the near future. Market observers watch this metric because its movement contains useful information for them.
