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Bitcoin Liquidity Ratio

BTC Reserve and BLR Chart Explanation

PreviousFunding RatesNextBitcoin Risk Indicator (BRI)

Last updated 22 days ago

This chart visualizes two key indicators:

  1. 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).

  2. 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! 🚀

BLR and Rezerves chart