A quant has suggested that the reason behind Coinbase’s recent negative premium could be due to Tesla’s bitcoin sale.
Tesla shedding 75% of its Bitcoin holdings could be behind the negative Coinbase premium gap
As one analyst explained in a CryptoQuant post, news of Tesla selling 75% of its BTC holdings appears to be behind Coinbase’s recent negative premium gap.
The “Coinbase Premium Gap” is an indicator that measures the price difference between Bitcoin listings on crypto exchanges Coinbase and Binance.
Since Coinbase is commonly used by US investors (especially large institutional ones), while Binance has a more global user base, this indicator can tell us something about the buying or selling behavior of US-based holders.
If the value of the metric is negative, it means that the value of BTC listed on Coinbase is currently less than on Binance. This indicates that some selling by American investors has taken place.
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On the other hand, the value of the premium gap greater than zero implies that buying is happening on Coinbase at the moment.
Now here is a chart showing the trend of the Bitcoin Coinbase premium gap over the past few months:
The value of the metric seems to have been red for the last few months | Source: CryptoQuant
As you can see in the chart above, Bitcoin Coinbase’s premium gap has been negative for some time apart from a brief bounce to green levels.
The quant notes that this was an indication that strong selling by high net worth or US-based institutional investors was ongoing.
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The latest news of Tesla dumping 75% of its total BTC holdings makes it clear that the source of the sale was Elon Musk’s company.
As can be seen from the chart, the Coinbase premium gap has improved over the past few days as selling pressure from Tesla eased.
BTC price
At the time of writing, the price of Bitcoin is hovering around $22.6k, up 15% over the past seven days. Over the past month, the crypto has gained 10% in value.
The chart below shows the evolution of the coin’s price over the last five days.
It looks like the value of the crypto has gone down a bit in the last 24 hours | Source: BTCUSD on TradingView
A few days ago, Bitcoin had witnessed a sharp uptrend, but over the past day, the coin has fallen in response to the news of Tesla’s dump.
Featured image by Shubham Dhage on Unsplash.com, charts by TradingView.com, CryptoQuant.com
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