Bitcoin: Can rising sell pressure thwart BTC price predictions

• BTC’s taker sell volume has risen to its highest level since the year began.
• The coin’s futures open interest has declined by 10% in the past few days.

Bitcoin’s [BTC] taker sell volume has surpassed its taker buy volume for the first time in 2023, CryptoQuant analyst Woo Minkyu found in a new report. 

Source: CryptoQuant

BTC’s taker sell volume tracks the total amount of the coin sold on exchanges by traders who immediately execute their orders at the current market price. Whenever this metric climbs, it hints at rising selling pressure in an asset’s market.

According to Minkyu, a rise in an asset’s taker sell volume “indicates a strong selling pressure, meaning that investors are keen to sell their assets at current prices, with more sellers present than buyers in the market.”

Commenting on the significance of this, Minkyu noted:

“The fact that Taker Sell Volume is higher than Buy Volume suggests that selling pressure in the market is surpassing buying pressure, which could lead to a short-term decrease in prices. because investors may be looking to avoid risk or liquidate their holdings in a market characterized by high uncertainty.”

Take heed, dear BTC holder

An assessment of BTC’s exchange activity confirmed the bearish sentiments gradually taking over the market. Since 10th December, the coin’s supply on exchanges has risen by 2%. 

At press time, 1.09 million BTC were held across cryptocurrency exchanges. 

Source: Santiment

It is key to note that a sustained rise in BTC supply on exchanges can lead to a further decline in the coin’s price as supply begins to outpace demand.

On the spot market, daily traders have increasingly stayed their hands from accumulating more BTCs. At press time, the coin’s Relative Strength Index (RSI) and Money Flow Index (MFI) trended downwards at 58.77 and 56.17, respectively. 

Although with values above the center lines, the downtrend movement of these indicators signaled a steady decline in demand for BTC while coin distribution intensified

Investors’ decision to watch the market from the sidelines may be due to the increase in price volatility in the past few days. 

Readings from the coin’s Bollinger Bands showed that the gap between the upper and lower bands of the indicator has gradually widened in the past few days. A gradual widening of these bands typically indicates an increase in market volatility.

Source: BTC/USD on TradingView

Read Bitcoin’s [BTC] Price Prediction 2023-24

Moreover, open interest has declined in the coin’s futures market in the past few days. According to data from Coinglass, this has dropped by 10% since 11th December.

A decline in an asset’s open interest, with a corresponding decline in price, suggests that traders are exiting their positions without opening new ones. This has been known to put downward pressure on an asset’s price.