Data shows that the Bitcoin Coinbase Premium Index has recently seen a surge, a sign that buying by US investors could help the recovery.
The Bitcoin Coinbase Premium Index (7-day SMA) has been rising lately
According to Julio Moreno, Head of Research at CryptoQuant, the Coinbase Premium Index has been on a strong uptrend lately. The “Coinbase Premium Index” here refers to a metric that tracks the percentage difference between the bitcoin price quoted on Coinbase (USD pair) and Binance (USDT pair).
This metric allows us to see which user base is buying or selling more assets on which platform. For example, if the value of the index is greater than zero, it means that there was additional buying pressure on Coinbase that pushed up the price of the asset on the platform (or just less selling pressure than on Binance). there on Coinbase).
Coinbase is known to be more heavily used by US-based investors (particularly large institutional traders), while Binance’s traffic is spread across the globe.
So, if there is more buying happening on Coinbase, it may be a sign that US-based investors are participating in more buying than global traders.
Here is a chart showing the trend of the 7-day Simple Moving Average (SMA) Bitcoin Coinbase Premium Index over the past few months:
The 7-day value of the metric seems to have increased in the past few days | Source: Julio Moreno on X
As shown in the chart above, the 7-day SMA Bitcoin Coinbase Premium Index was only negative this month, suggesting that global investors have either overtaken US traders in accumulation or Americans in higher sizes have sold.
However, when it was recently announced that the probability of BTC spot ETFs being approved in the US was increasing, the indicator has turned around and is now showing an upward trend.
The indicator has risen sharply over the past day, suggesting that US-based institutional traders may now be participating in some strong buying.
During the same period, bitcoin staged a recovery rally that saw the price of the cryptocurrency briefly manage to reach $30,000 before falling back to current levels.
Of course, the timing of the rally and the sharp rise in the 7-day Coinbase Premium Index could indicate that buying by American holders is fueling the move.
Grayscale Bitcoin Trust (GBTC) Premium, a metric that checks whether GBTC is trading at a premium or discount, has also been trending higher recently, suggesting that the discount on the fund is narrowing (although it is narrowing is not yet in positive territory). in contrast to the Coinbase Premium Index).
It looks like the value of the metric is getting less negative | Source: CryptoQuant
GBTC is a fund that allows users to invest indirectly in Bitcoin in ways that traditional investors would be more familiar with. As such, this metric provides indications of the buying or selling activity that the more conventional US institutional traders are currently engaged in.
BTC price
At the time of writing, Bitcoin is trading around $29,800, up 1% over the past week.
BTC has seen some bounce over the past day | Source: BTCUSD on TradingView
Featured image by Kanchanara on Unsplash.com, charts by TradingView.com, CryptoQuant.com
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