Market analysts believe bitcoin (BTC) still has about three months to complete this bull run, but on-chain signals are suggesting otherwise. One such indicator is the Taker Buy/Sell Ratio, which just plummeted to a level not seen in over seven years.

Data obtained by the market intelligence platform, CryptoQuant, revealed that such declines in the Taker Buy/Sell Ratio could signal the onset of a prolonged downward market trend.

Bitcoin Buy/Sell Ratio Hits Multi-Year Low

Over the last few days, the 30-day moving average of the Bitcoin Taker Buy/Sell Ratio has fallen from the 1.01 range to below 0.98. This is the lowest the metric has fallen since May 2018. What is more concerning is that the ratio is currently below the levels seen in November 2021, when BTC reached its previous high above $69,000.

According to CryptoQuant analysts, the moving average tracks buying and selling pressure in the Bitcoin market. A steep decline in this indicator suggests that there is minimal buying and more selling activity for BTC.

Within a short timeframe, the plunge reflects a sharp weakening of BTC buying pressure. Historically, an average below 0.98 is considered a strong sell-off signal, as sell-side orders exceed buy-side orders. Typically, such market dynamics result in a significant price decline in the short term.

Risk of Prolonged Market Correction

However, examining the Taker Buy/Sell Ratio chart over the long term shows an interesting pattern. It appears that the buy-to-sell ratio has continued to decrease despite consistent upswings in bitcoin’s price.

CryptoQuant says the pattern suggests that bitcoin’s price growth has not been driven by strong buying momentum. This increases the risk of a price correction propelled by heavy selling pressure in the near term.

“In conclusion, the sharp drop in the 30-day moving average of the Taker Buy/Sell Ratio serves as a warning that Bitcoin’s market may face significant selling pressure in the short term. If this trend persists, we should expect a severe price correction or even a prolonged downward market trend,” the platform stated.

Although CryptoQuant believes the Bitcoin market may be at the brink of a severe and prolonged decline, other analysts say the bull cycle is only 93% done. CryptoPotato reported that there are expectations of a final rally between late October and mid-November, before the bear market kicks in properly. It remains to be seen how this plays out.