The perpetual futures market has significantly influenced crypto prices in recent years. Examining this market’s metrics can offer valuable insights for predicting future price movements. One key metric is the 7-day moving average of the Taker Buy Sell Ratio, which indicates whether buyers or sellers are dominating market orders. Since market orders directly impact prices, this metric is crucial.
The Taker Buy Sell Ratio has consistently been below 1 for the past few months, suggesting that sellers have been more active in the ETH futures market. This aggressive selling could be due to speculative activities or as a hedging strategy for spot portfolios. However, despite being below 1 for the last five months, the ratio has recently shown a gradual increase, coinciding with a rise in ETH prices. It is now approaching the 1 mark.
This upward trend in the Taker Buy Sell Ratio indicates a potential shift in market dynamics. If the ratio continues to rise, it may signal a reduction in aggressive selling pressure. Consequently, with sufficient demand from the spot market, this shift could sustain the current uptrend.
Written by ShayanBTC