Bitcoin’s Sell-Side Risk Ratio Plummets Amid ‘Profit-Taking Exhaustion’
cryptoglobe.com 12 September 2024 03:19, UTC The cryptocurrency market continues to exhibit signs of turbulence as Bitcoin’s sell-side risk ratio, which measures the ratio of realized profit and loss relative to market size and indicates potential for heightened volatility, has experienced a sharp decline in recent days.
According to a post made by popular cryptocurrency market analyst Kyle Doops on the microblogging platform X (formerly known as Twitter), the recent drop in Bitcoin’s sell-side risk ratio suggests that profit-taking may be nearing its end, paving the way for increased price fluctuations similar to those seen in 2019.
The Sell-Side Risk Ratio measures realized profit and loss relative to market size.
High values indicate significant profits or losses, signaling volatility, while low values suggest equilibrium.
A recent decline into the lower band suggests that most coins are near break-even,… pic.twitter.com/AhYsPJPsEJ
— Kyledoops (@kyledoops) September 10, 2024
The price of the flagship cryptocurrency Bitcoin is currently below the $57,000 mark after trading above $64,000 late last month. Earlier this month the market endured a significant sell-off that saw the price of BTC dip to a low under $53,000, with the market then dipping into “extreme fear.”
The Crypto Fear & Greed Index, which serves as an aggregate for investor confidence and attitude towards the market, dropped to 22, before it started to recover. The index saw a low around 6 when BTC dropped below $18,000 in 2022 after the collapse of popular cryptocurrency exchange FTX.
As reported, a mystery trader has managed to make more than $10 million betting on volatility rising this month, which also negatively affects the cryptocurrency space. CCData has revealed that the September Effect is also present in the cryptocurrency space, with Bitcoin’s September performance from 2010 to 2023 averaging a negative return of 4.5%.
/1 In this week’s Chart of the Week, we analyse Bitcoin’s performance from September 2010 to 2023.
While history doesn’t repeat itself, September has consistently been one of the worst months for Bitcoin, with only 6 positive Septembers recorded in the asset’s history. pic.twitter.com/RKQhEQpev8
— CCData (@CCData_io) September 3, 2024
In those 13 years, the data shows that Bitcoin’s price performance in September was only positive six times. In contrast, April, November and October have seen average returns of 35.6%, 39.2%, and 28.7% respectively.
Featured image via Unsplash.
