The positive Bitcoin Coinbase premium that fueled the recent rally above $70,000 has disappeared, suggesting that buying has already slowed.
The Bitcoin-Coinbase premium gap has returned to neutral levels
CryptoQuant Netherlands Community Manager Maartunn explained in a post on
The “Coinbase Premium Gap” here refers to a metric that tracks the difference between BTC prices listed on cryptocurrency exchanges Coinbase (USD pair) and Binance (USDT pair).
If the value of this metric is positive, it means that the price listed on Coinbase is currently higher than that on Binance. Such a trend implies that buying pressure is higher on the former than on the latter platform (or alternatively, that selling pressure is simply lower there).
On the other hand, a negative value could mean that the selling pressure is higher on Coinbase than on Binance because the price of the cryptocurrency listed there is lower.
Now here is a chart showing the trend of the Bitcoin Coinbase Premium Gap over the last few days:
NewsBTC
The chart shows that the Bitcoin Coinbase Premium Gap has taken on significantly positive values as the asset's recent price increase has taken place. Since then, however, the metric has fallen and its value is approaching zero.
It appears that buying pressure on the platform contributed to the increase. The fact that the rally has slowed since the indicator returned to neutral levels could be further evidence.
However, this is not unnatural for this year as the Bitcoin price and the Coinbase Premium Gap have had a fairly close relationship since the beginning of 2024.
Coinbase is popularly known as the preferred platform of American institutional investors, while Binance handles more global traffic. Therefore, the value of the reward provides insight into how the behavior of US-based large holders differs from that of global users.
Since the Coinbase Premium Gap was the driver of the recent price increase, buying from these institutional units could have potentially provided the fuel.
Since the value of the indicator has now approached the neutral mark, this would mean that these whales have taken their foot off the gas. Given the close relationship between the metric and the BTC price, it might be worth keeping an eye on developments in the coming days.
BTC could see a slight decline if the premium turns negative from here. Of course, a continuation of positive readings would be a bullish sign instead.
BTC price
At the time of writing, Bitcoin is trading around $70,100, up more than 11% in the past week.
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