Journalist
Posted:
- Profit-taking activities are gaining momentum as the price of BTC remains in a tight range.
- Short- and long-term coin holders have largely realized profits on their investments since coin distribution began.
Bitcoins [BTC] The taker buy-sell ratio, assessed on a 30-day simple moving average (SMA), has initiated a decline, indicating that profit-taking activity is beginning to gain momentum, data from CryptoQuant revealed.
BTC’s profit-taking activity is increasing
The taker buy-sell ratio is a metric that measures the ratio between the buying volume and the selling volume in the futures market of an asset.
A value greater than 1 indicates more buying volume than selling volume, while a value less than 1 indicates more selling volume than buying volume.
In a recent one reportpseudonymous CryptoQuant analyst Greatest Trader found that the measure trended upward as the price of BTC rose in October.
However, with the price of the leading coin stagnating at $36,500 in recent days, “the measure reversed its trend and entered a downtrend, approaching the threshold of 1.”
According to the analyst:
“This decline suggests that participants are increasingly inclined to take short positions and realize profits. This shift in metric is particularly consistent with the market’s recent consolidation and struggle to move up. The convergence of these events suggests that participants are more interested in short-term gains during this phase of price stability.”
BTC’s taker buy-sell ratio (30d SMA) was 1.007 at the time of writing.
Source: CryptoQuant
The steady decline in BTC’s open interest in the futures market confirms the analyst’s view. Dates of Mint glass showed that the coin’s open interest has fallen 6% since November 9. At the time of writing, BTC’s open interest stood at $14.94 billion.
When BTC open interest decreases in this way, it is a signal that traders are closing their positions. This often leads to a potential reversal in the direction of the market.
Source: Coinglass
Short and long term holders who sell above their cost
An assessment of the issued output profit ratio (SOPR) for short- and long-term BTC holders found that both cohorts of investors have realized profits to date since they began distributing coins.
An asset’s SOPR measures the amount of profit and loss incurred by its holders over a given period of time. When the metric returns a value greater than one within a given period, it means that those who sold during that period did so at a profit.
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Conversely, when an asset’s SOPR is less than one within a given time period, those who sold within that time frame suffered losses.
At the time of writing, the short-term holding SOPR on a 30-day moving average was 1.01. As for long-term holders, the SOPR was 1.28, according to data sourced from CryptoQuant.