Data indicates that the Bitcoin Coinbase Premium Index has just seen a sharp spike into positive territory, a potentially bullish sign for the BTC price.
The Bitcoin Coinbase Premium Index has been rising recently
like Analyst at CryptoQuant Quicktake Another explainedThe Bitcoin Coinbase Premium Index saw a rise despite the decline in the asset’s price.
“Coinbase Premium Index” refers to an index that tracks the percentage difference between the BTC price listed on Coinbase (USDPair) and the Binance price (USDT Pair).
When the value of this metric is positive, the cryptocurrency trades at a higher rate on Coinbase than on Binance. This trend indicates that earlier users engage in more buying (or less selling) than later users.
On the other hand, a number below zero indicates that Binance users are exercising higher buying pressure as BTC is being sold at a higher price there than on Coinbase.
Now, here’s a chart showing the trend in the Bitcoin Coinbase Premium Index over the past month or so:
The value of the metric appears to have seen a green spike recently | Source: CryptoQuant
As the chart above shows, the Bitcoin Coinbase Premium Index has fallen into negative territory as there has been a decline in the price of Bitcoin. However, its value has since rebounded back into positive territory.
The temporary drop into negative territory indicates that Coinbase users were selling, which could cause the price to fall, but they have since accumulated.
In the chart, the quantitative measurement highlighted what typically follows positive spikes in the Coinbase Premium Index over the past month. It appears that BTC tends to see upward momentum while buying is occurring on Coinbase. This is a pattern that continues to emerge in 2024.
Coinbase’s main traffic includes US users, especially large institutional entities, while Binance serves users around the world. As such, the Coinbase Premium indicator essentially represents the difference in behavior between US-based whales and global whales.
The close relationship that Bitcoin has shown with the Coinbase Premium indicator naturally means Which was driven by American institutional investors assets this year.
With buying pressure seemingly returning from these entities after the pause, the cryptocurrency price may once again be ready to see a continued rally.
Bitcoin price
The past day has been red for the cryptocurrency sector as a whole, but Bitcoin has come out relatively unscathed so far, seeing a 3% decline taking its price to $95,000.
Looks like the price of the coin has registered a plunge during the last 24 hours | Source: BTCUSDT on TradingView
Featured image by Dall-E, CryptoQuant.com, chart from TradingView.com
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