Bitcoin Coinbase Premium Returns To Neutral, Buying Exhausted?

Data shows the Bitcoin Coinbase Premium Index has declined towards neutral values recently, implying buying pressure may be running out.

Bitcoin Coinbase Premium Index Has Gone Down Recently

An analyst in a CryptoQuant Quicktake post explained that the Coinbase Premium Index has been decreasing recently. The “Coinbase Premium Index” here refers to the percentage difference between the Bitcoin prices listed on the cryptocurrency exchanges Coinbase (USD pair) and Binance (USDT pair).

The former exchange is used more by US-based investors (especially large institutional holders), while the latter has global traffic. As such, the Coinbase Premium Index can reveal the difference in the behaviors of the two demographics.

When the value of this metric is positive, it means that the cryptocurrency’s price is higher on Coinbase than on Binance. Such a trend could suggest that the buying pressure is greater on the former platform or the selling pressure is lower.

On the other hand, below zero indicates that global investors may be participating in a higher amount of buying than American traders currently. Now, here is a chart that shows the trend in the Bitcoin Coinbase Premium Index over the past year:

The value of the metric seems to have been been going down in recent days | Source: CryptoQuant

The above graph shows that the Bitcoin Coinbase Premium Index has been positive since September. This implies that American investors have recently had relatively higher buying pressure.

From the chart, it’s also apparent that highly positive values of the indicator accompanied all the surges in the cryptocurrency’s price during this period.

However, in the past few days, the metric’s value has plunged towards the neutral zero level, a sign that buying/selling pressure has been balanced between global and US-based investors.

As this plummet in the metric has occurred, the asset’s price has also seen Go to Source to See Full Article
Author: Keshav Verma

Did you like this?
Tip BTC Newswire with Cryptocurrency