Net taker volume for bitcoin nears bullish crossover
On-chain data shows that Bitcoin net taker volume is approaching a break above a line that has historically been a bullish signal for the price.
Bitcoin Net Taker Volume has been moving towards the zero line recently
As pointed out by one analyst in a CryptoQuant post, this type of crossover has appeared four times in the last year or so. “Net taker volume” is an indicator that measures the difference between taker buy and taker sell volumes in the market.
This calculation must not be confused with the buy/sell ratio, which, as the name already suggests, tells us about the relationship between these two volumes, rather than their difference.
When net taker volume has a positive value, it means that the receiver’s buying volume is currently greater than the receiver’s selling volume. Such a trend suggests that bullish sentiment is more dominant in the market right now.
On the other hand, the indicator with values less than zero suggests that the short volume is overwhelming the long volume at the moment and therefore a bearish sentiment is shared by the majority of investors.
Now, here’s a chart showing the trend in 30-day moving average (MA) Bitcoin net taker volume over the past year:
Looks like the 30-day MA value of the metric has been rising in recent days | Source: CryptoQuant
As you can see in the graph above, the quant has marked the relevant points in the trend of the 30-day MA Bitcoin net taker volume, as well as the corresponding pattern shown by the price of the asset.
It seems that every time this indicator has crossed above the zero line from the negative zone, the value of the cryptocurrency has followed with some upward momentum.
“When the indicator crosses above zero, it means that above a 30D moving average, the volume through receiving BUY orders is higher than sellers,” the analyst explains. “This will result in buying power for Bitcoin.”
In total, there were previously four instances of this pattern over the past year or so. In some of these events, the bullish effect came with some delay, with the most prominent example of this being the crossover that ultimately led to the current rally in the BTC price.
Recently, the 30-day MA Bitcoin taker’s net volume has been in the negative zone, which means sell orders have dominated the market. But in recent days, the value of the metric has increased, and it is now approaching the zero level again.
If the indicator continues on this path, a move into the positive zone could take place, which, if previous patterns are anything to go by, could have a constructive effect on the price.
BTC price
At the time of writing, Bitcoin is trading around $28,300, up 1% in the past week.
BTC has sharply risen in the past day | Source: BTCUSD on TradingView
Featured image from 2 Bull Photography on Unsplash.com, Charts from TradingView.com, CryptoQuant.com
