Data shows that the Bitcoin Coinbase Premium Index just experienced a sharp rise into positive territory, a sign that could be positive for BTC price.
The Bitcoin Coinbase Premium Index has risen sharply recently
As an analyst in a CryptoQuant quicktake Post explainedThe Bitcoin Coinbase Premium Index recorded an increase despite the decline experienced by the asset’s price.
The “Coinbase Premium Index“refers to an indicator that tracks the percentage difference between the BTC price listed on Coinbase (USD pair) and the price listed on Binance (USDT pair).
If the value of this metric is positive, the cryptocurrency is trading at a higher rate on Coinbase than on Binance. Such a trend suggests that earlier users are engaged in higher buying volume (or lower selling volume) than later users.
On the other hand, the sub-zero value suggests that Binance users are exerting more buying pressure as BTC is selling there at a higher price than on Coinbase.
Now here is a chart showing the trend of the Bitcoin Coinbase Premium Index over the last 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 plunged into negative territory as there was a decline in the price of Bitcoin. Nevertheless, its value has since returned to positive territory.
The temporary dip into negative territory suggests that Coinbase users were selling, which may have caused the price to drop, but they have since increased their holdings again.
In the chart, the quantity highlighted what typically follows positive spikes in the Coinbase Premium Index over the past month. It appears that BTC is trending toward bullish momentum while buying has taken place on Coinbase. This is a pattern that has occurred continuously throughout 2024.
Coinbase’s main traffic is American users, particularly large institutional entities, while Binance serves users worldwide. Therefore, the Coinbase Premium Index essentially represents the behavioral difference between US-based and global companies whales.
The close relationship that Bitcoin has shown with the Coinbase Premium Index means of course this American institutional investors were the drivers of the asset this year.
As buying pressure from these companies appears to be returning after the break, the price of the cryptocurrency could be primed for a continuation of the rally again.
BTC price
The past day was a negative one for the entire cryptocurrency sector, but Bitcoin has escaped relatively unscathed so far, posting a 3% decline that pushed 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 from Dall-E, CryptoQuant.com, chart from TradingView.com
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