Data shows that the Bitcoin Coinbase Premium Index just saw a sharp rise into the positive region, a sign that could be bullish for the price of BTC.
Bitcoin Coinbase Premium Index recently peaked
If an analyst in a CryptoQuant Quicktake message explainedthe Bitcoin Coinbase Premium Index has seen an increase despite the decline in the asset’s price.
The “Coinbase Premium Index” refers to an indicator that tracks the percentage difference between the BTC price quoted on Coinbase (USD pair) and that on Binance (USDT pair).
When the value of this metric is positive, the cryptocurrency is trading at a higher price on Coinbase than on Binance. Such a trend suggests that former users buy more often (or sell less) than latter users.
On the other hand, the below zero indicates that Binance users are exerting higher buying pressure as BTC is selling at a higher price there than on Coinbase.
Here is 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 plunged into negative territory when Bitcoin’s price drop occurred. Still, the value has since returned to the positive region.
The temporary dip into the negative zone implies that Coinbase users were selling, which may have caused the price to plummet, but they have since resumed their accumulation.
In the chart, the quant highlighted what typically followed positive spikes in the Coinbase Premium Index over the past month. It appears that BTC has tended to see bullish momentum while buying on Coinbase. This is a pattern that has appeared continuously in 2024.
Coinbase’s main traffic is to US users, especially the large institutional entities, while Binance serves users worldwide. As such, the Coinbase Premium Index essentially represents the difference in behavior between US-based and global whales.
The close relationship Bitcoin has shown with the Coinbase Premium Index obviously means that American institutional investors were the drivers of this year’s trump card.
With buying pressure from these entities seemingly returning after the break, the cryptocurrency’s price may be poised for a continuation of the rally once again.
BTC price
The past day has been a red one for the cryptocurrency sector as a whole, but Bitcoin has emerged relatively unscathed so far, with a 3% drop 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 from Dall-E, CryptoQuant.com, chart from TradingView.com