Data from CryptoQuant has shown that institutional investors have been the driving force behind Bitcoin’s recent rise above $100,000.
The Bitcoin Coinbase Premium Index has been positive recently
In a new one post On X, on-chain analytics firm CryptoQuant discussed the latest trend in the Bitcoin Coinbase Premium Index. The “Coinbase Premium Index“refers to a metric that tracks the percentage difference between the BTC price listed on Coinbase (USD pair) and the price listed on Binance (USDT pair).
The indicator tells us how buying or selling behavior differs between user groups of these cryptocurrency exchange giants. Coinbase’s primary traffic is US-based investors, particularly large ones institutional unitswhile Binance hosts users worldwide.
When the Coinbase Premium Index has a positive value, the asset is trading at a higher rate on Coinbase than on Binance. Such a trend suggests that American whales have exerted greater buying or less selling pressure than global investors.
On the other hand, the negative indicator suggests that Binance users may be buying more than Coinbase users as BTC seeks a higher price there.
Now here is the chart shared by the analytics firm showing the trend of the Bitcoin Coinbase Premium Index over the past year:
The value of the metric appears to have been quite positive in recent weeks | Source: CryptoQuant on X
As shown in the chart above, the Bitcoin Coinbase Premium Index saw a sharp rise into positive territory in early November and has remained in that range since then, except for a brief decline.
Of course, this trend means that buying pressure has consistently been higher on Coinbase than on Binance. The Price of the asset enjoyed one sharp rally in this period, so it also appears that this accumulation US-based investors fueled the upswing.
The chart shows that this pattern has also been observed multiple times over the past year, with positive spikes on the Coinbase Premium Index generally being bullish for Bitcoin.
The recent rally to the new all-time high (ATH) above $104,000 also came as the indicator recorded another sharp green increase. American institutional investors therefore appear to play a central role in the market.
Given this pattern, the Coinbase Premium Index is of course an indicator to keep an eye on in the near future, as new changes could once again foreshadow the fate of the Bitcoin price.
BTC price
At the time of writing, Bitcoin is trading at around $100,800, up more than 6% in the past week.
Looks like the price of the coin has observed a sharp surge during the past day | Source: BTCUSDT on TradingView
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
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