Short-term market and on-chain data hint at upcoming recovery
The majority of on-chain indicators widely used by traders and investors aim for long-term or macro analysis of the market, but there are still options for those using intraday charts and derivatives trading. The Taker Buy Sell Ratio is one such indicator that helps traders see the next short-term market moves.
The indicator simply measures the ratio between the volume of longs and shorts on the market. Such a simple indicator that divides to ratios can give us a hint of the upcoming short-term volatile movements of the market.
Essentially, the metric reflects the intentions of derivatives traders in the here and now. One of the main drawbacks is the inability of the metric to predict an unexpected spike in buying or selling volume, which occurs when large players are ready to buy or sell their holdings.
As the indicator suggests now, bulls are currently controlling the market despite the most recent price spike, which indicates that investors and traders are ready to push the price further.
Although the indicators offer relatively high accuracy, the predicted price action may not take place as Bitcoin failed to breach the upper boundary of the consolidation channel formed since May.
Two days ago, Bitcoin failed to break the support line following increased fears on the market after increase regulatory pressure on the world’s biggest cryptocurrency exchange, Binance, which caused a massive plunge of the BNB cryptocurrency.
At press time, Bitcoin is trading at $30,429 and heading back down to $30,000, which is the lower boundary of the consolidation channel. Etherum and other alternative cryptocurrencies are also losing around 5% in value.
