As Ethereum Approaches $4k, On-chain Data Shows Rally Will Continue Even Higher
03 September 2021 - 9:00PM
NEWSBTC
Even with Ethereum’s strong run where the coin has reached near
$4k, on-chain data shows there is still more room for the bull
rally to continue. Ethereum All Exchanges Taker Buy Sell Ratio
Shoots Up As pointed out by a CryptoQuant post, the ETH all
exchanges taker buy sell volume has shown a huge spike today. The
Ethereum all exchanges taker buy sell ratio (or volume) is an
indicator that shows the ratio between long volume and the taker
seller volume. Now, common sense says, since every trade needs a
buyer and a seller, how can there exist a difference between the
two quantities? Well, to understand the concept of taker buy and
sell volumes, the idea of taker and maker needs to be understood
first. Quoting the CryptoQuant data guide: Taker: Taker trade
refers to an order that is traded before going on the order book.
All market order trades are takers. Maker: Maker trade refers to an
order that goes on the order book (e.g. a limit order). These
orders add volume to the order book, helping to ‘make the market’.
When these takers buy ETH at the price set by makers, the amount of
coins traded contributes to the taker seller volume. This volume is
referred to as “seller” because it can drive the prices down.
Related Reading | Why Bitcoin And Ethereum Could Be In Trouble
As Derivatives Pressure Mounts On the other hand, takers selling to
makers at the ask price can push the prices up, thus contributing
to the buyer volume. The ratio between these two volumes is
precisely the taker buy-sell ratio. If the taker buy volume is
higher than the sell volume (that is, the value of indicator is
above one), it means more trades are occurring at the ask price.
This shows there is more demand and so the prices go up. Related
Reading | As Bitcoin Breaks $50k, Indicators Show A Calm
Before The Storm Now, here is a chart that shows how the value of
this metric looks like for Ethereum right now: The ETH metric
spikes up | Source: CrytpoQuant A high value of the indicator such
as right now suggests the Ethereum taker buy volume is greatly
overwhelming the sell volume. A similar spike was seen in the
middle of August, and the price moved up in response. So, if the
indicator is to be believed, the current high value might also
result in further movement upwards. ETH Price At the time of
writing, Ethereum floats just under $4k, up 22% in the last seven
days. Monthly gains for the coin are around 47%. The below chart
shows the trends in ETH’s value over the last three months.
Ethereum's price very sharply moves up as the crypto aims to test
$4k | Source: ETHUSD on TradingView
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