Bitcoin Liquidity Ratio
BTC Reserve and BLR Chart Explanation
This chart visualizes two key indicators:
Exchange Reserves (Blue Area Chart):
Represents the total amount of Bitcoin held in exchanges.
A decreasing reserve may indicate that investors are withdrawing BTC for long-term holding (bullish signal).
An increasing reserve suggests more BTC is available for selling, which could indicate potential selling pressure (bearish signal).
Bitcoin Liquidity Ratio (BLR - Orange Area Chart):
Calculated as Exchange Reserves ÷ Trading Volume.
A higher BLR means there is more BTC on exchanges relative to trading activity, indicating lower liquidity and possible price stagnation.
A lower BLR suggests high trading activity compared to available reserves, meaning higher liquidity and potentially stronger price movements.
How to Use This Indicator?
Rising BTC reserves + Rising BLR → Possible selling pressure (bearish).
Falling BTC reserves + Falling BLR → Investors may be accumulating BTC (bullish).
Stable BTC reserves but decreasing BLR → Market liquidity is improving, which often supports price stability or upward trends.
📊 Summary:
Monitor reserves for accumulation or sell-off trends.
Track BLR to assess market liquidity and potential volatility.
Combine with other indicators (e.g., Open Interest, Funding Rates) for better analysis.
Bitcoin Liquidity Ratio (BLR) Formula Explanation
What Does It Mean?
Exchange Reserves: Total BTC held on exchanges.
Trading Volume: Total BTC traded within a specific period.
BLR shows how much BTC is available relative to trading activity.
How to Interpret BLR?
High BLR: More BTC on exchanges, but low trading activity → Lower liquidity (possible price stagnation).
Low BLR: More BTC is being traded relative to reserves → Higher liquidity (potential price movements).
🔍 Tip: Use BLR alongside exchange inflows/outflows and market trends for better insights! 🚀
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