The positive Bitcoin Coinbase Premium that fueled the last rally above $70,000 has dissipated, suggesting buying has already slowed.
Bitcoin Coinbase Premium Gap Returned to Neutral Levels
CryptoQuant Netherlands Community Manager Maartunn explained in a publish at X that the Bitcoin Coinbase Premium Gap fell back to the neutral line.
O “Coinbase Premium Gap” here refers to a metric that monitors the difference between BTC prices listed on cryptocurrency exchanges Coinbase (USD pair) and Binance (USDT pair).
When the value of this metric is positive, it means that the price listed on Coinbase is higher than that of Binance at the moment. Such a trend implies that the buying pressure on the first is greater than on the second platform (or, alternatively, the selling pressure is just lower).
On the other hand, a negative value could imply that the selling pressure on Coinbase is greater than on Binance, as the price of the cryptocurrency listed there is lower.
Now, here is a chart showing the Bitcoin Coinbase Premium Gap trend over the past few days:
The value of the metric appears to have been close to the neutral line recently | Source: @JA_Maartun on X
The chart shows that the Bitcoin Coinbase Premium Gap reached notably positive values as the last upward push in the asset price occurred. Since then, however, the metric has fallen, with its value approaching zero.
It appears that buying pressure on the platform contributed to the increase. The fact that the recovery has slowed since the metric returned to neutral levels may add further evidence.
However, this is not unusual for this year, as the price of Bitcoin and the Coinbase Premium Gap have shown a fairly close relationship since the beginning of 2024.
Coinbase is popularly known as the preferred platform for American institutional investors, while Binance hosts more global traffic. As such, the premium value provides insight into how the behavior of large US-based holders differs from the behavior of global users.
Since the Coinbase Premium Gap has been the driver of recent price increases, buying from these institutional entities could have potentially provided the fuel.
As the value of the indicator has already approached the neutral mark, this would imply that these whales have taken their foot off the accelerator. Given the close relationship the metric and BTC price have had recently, it might be worth keeping an eye on how things evolve in the coming days.
BTC could see some decline if the premium moves into the red from here. Naturally, a continuation of positive values would be a bullish signal.
BTC Price
At the time of writing, Bitcoin is trading around the $70,100 level, up more than 11% over the past week.
Looks like the value of the asset has been going up over the last few days | Source: BTCUSD on TradingView
Featured image by Kanchanara on Unsplash.com, CryptoQuant.com, chart from TradingView.com
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