Strong buy signals suggest cryptocurrency bullrun

Posted: 20 April 2018 6:15 pm
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Market indicators suggest quickly changing sentiment might push prices upwards.

Turtle BC has an interesting tool for gauging the proportion of buy and sell signals in the market, and the last month has seen a fairly dramatic shift.

This chart shows the percentage of buy orders in the market, compared to sell orders. At the moment the picture was taken it was showing that 91.43% of the market was buy orders.

You can probably tell at a glance how closely this mirrors price behaviour. The last surge before this one was in the frothy cryptocurrency markets of December and January, while the last run up in buy market percentage started at 1 April, when bitcoin prices dropped to around $6,500.

The mini-plateau in mid April is a perfect fit for the pause and that massive surge which was accompanied by experts predicting that bitcoin had bottomed out for the year.

It's not entirely clear where Turtle BC is getting the numbers from, or whether it accounts for wash trading and other manipulative factors. Plus, recent months have seen no shortage of bullish predictions, and for every optimistic prediction that's correct there are plenty that aren't.

However, going back at a glance this seems to be a reasonable indicator of prices and even picks up relatively small shifts in hindsight. Plus it's a sizable shift. Even assuming a very pessimistic margin of error, one would be hard pressed to get anything but an optimistic read from this chart. The last time the buy ratio order percentage topped 90%, in fact, was almost a year ago last March.

It also makes a reasonable amount of sense that prices would be climbing back up at the moment. A wave of institutional money might be buoying up prices, while the wrapping up of tax time may have seen a decent amount of money return to the market.

Everything should be taken with a grain of salt, there are no guarantees of any kind and it might be worth delving deeper into how exactly these figures are obtained, but this chart alone suggests a rosy outlook that seems to be matching prices quite well.

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, NANO

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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