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The majority of on-chain indicators widely used by traders and investors are aimed at the long-term or macro-analysis of the market, but there are still options for those who are using intraday charts and derivatives trading. The "Taker Buy Sell Ratio" is one of those indicators that helps traders to see upcoming short-term market movements.
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 right here and now. One of the main drawbacks is the inability of the metric to predict an unexpected buying or selling volume spike, which happens when large players are willing to buy or sell their holdings.
If you're a short-term derivative trader and doing range trading $BTC with tight stop-loss, this indicator could be helpful.— Ki Young Ju (@ki_young_ju) June 7, 2022
"Taker Buy Sell Ratio" is the ratio between how much long/short volume opened via market orders.
Live Chart ?https://t.co/1zXBvMFLNr pic.twitter.com/ig5avvW1cl
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.
Though the indicators offer relatively high accuracy, the forecasted price action may not take place since Bitcoin has failed to break through the upper border 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 trades at $30,429 and is going down back to $30,000, which is the lower border of the consolidation channel. Etherum and other alternative cryptocurrencies are also losing about 5% of their value.