Data shows that the Coinbase Premium bitcoin Index has recently declined towards neutral values, implying that buying pressure may be running out.
Coinbase bitcoin Premium Index Has Dropped Recently
An analyst at CryptoQuant Quicktake btc-Coinbase-Korea-Premium-Index” target=”_blank” rel=”noopener nofollow”>mail He explained that the Coinbase Premium index has been declining recently. The “Coinbase Premium Index” here refers to the percentage difference between bitcoin prices listed on the cryptocurrency exchanges Coinbase (USD pair) and Binance (USDT pair).
The first exchange is more used by US-based investors (especially large institutional holders), while the second has global traffic. As such, the Coinbase Premium Index can reveal the difference in the behaviors of the two demographic groups.
When the value of this metric is positive, it means that the price of the cryptocurrency is higher on Coinbase than on Binance. Such a trend could suggest that buying pressure is higher on the first platform or that selling pressure is lower.
On the other hand, a value below zero indicates that global investors may be engaging in a greater amount of buying than US traders currently. Now, here is a chart showing the trend in the Coinbase Premium bitcoin Index over the past year:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/10/Bitcoin-Coinbase-Premium-goes-neutral-again-purchases-sold-out.png" alt="bitcoin Premium Index Coinbase” width=”1280″ height=”806″/>
The value of the metric seems to have been been going down in recent days | Source: btc-Coinbase-Korea-Premium-Index" target="_blank" rel="noopener nofollow">CryptoQuant
The chart above shows that the Coinbase Premium bitcoin Index has been positive since September. This implies that US investors have had relatively greater buying pressure recently.
It is also clear from the graph that very positive values of the indicator accompanied all increases in the price of the cryptocurrency during this period.
However, in recent days, the metric’s value has plummeted towards the neutral zero level, a sign that the buying/selling pressure has balanced between global and US investors.
As this metric plummet occurred, the price of the asset also saw some decline. These observations suggest that US traders may have fueled bitcoin‘s latest bullish momentum.
Since its buying pressure disappeared, the price of the cryptocurrency has also plummeted. If bitcoin has to recover, perhaps the Coinbase Premium Index needs to turn positive.
The quant has also shared data from the btc Korea Premium Index, which is an indicator that works similarly to the Coinbase Premium Index, except that it tracks the difference between the price quoted on South Korean exchanges and that of the foreign platforms.
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/10/1696977199_744_Bitcoin-Coinbase-Premium-goes-neutral-again-purchases-sold-out.png" alt="bitcoin Korea Premium Index” width=”1280″ height=”806″/>
Looks like this metric has been rising recently | Source: btc-Coinbase-Korea-Premium-Index" target="_blank" rel="noopener nofollow">CryptoQuant
Unlike the Coinbase Premium index, this indicator has been trending recently, implying that South Korean investors have only been increasing their purchases.
btc Price
At the time of writing, bitcoin is trading at around $27,400, up 1% in the last week.
<img decoding="async" loading="lazy" class="alignnone size-medium aligncenter" src="https://www.tradingview.com/x/CLEXLXwj/" alt="bitcoin price chart” width=”1534″ height=”869″/>
btc has mostly been moving sideways over the past few days | Source: BTCUSD on TradingView
Featured image by Kanchanara on Unsplash.com, TradingView.com charts, CryptoQuant.com
