bitcoin's recent foray into the $70,000 price territory has once again become a hot topic among investors, with many seeing a positive price outlook. As a result of this fascinating price action, the vast majority of long term holders have seen their holdings cross into the profit zone. In particular, the positive outlook appears to be positive among US-based investors, as evidenced by the Coinbase premium turning positive. Some see the return of the Coinbase premium as a bullish signal that could continue to push the price higher.
Coinbase Premium Index Turns Positive
The Coinbase Premium Index (IPC), which had been trading negative since May 18, has now turned positive, according to a cryptocurrency analyst who cited data from CryptoQuant. Coinbase Premium refers to the difference in the price of bitcoin on Coinbase versus other major exchanges.
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When the premium turns positive, it means that bitcoin is trading at a higher price on Coinbase compared to Binance and subsequently other major crypto exchanges. This is important because it shows increased demand for bitcoin on one of the largest US crypto exchanges. On the other hand, a negative premium indicates a lack of substantial buying pressure from US-based traders.
Since Coinbase is a popular entry point for new US cryptocurrency investors, a higher price indicates that money is flowing into bitcoin. At the time of writing, CryptoQuant data shows that this premium recently reached 13.11. While this may seem small, it definitely indicates the beginning of buying pressure that could send bitcoin up another leg higher.
Interestingly, this shift toward a positive Coinbase premium came with a less optimistic outlook on bitcoin among Korean and Asian investors, at least in the near term. This information is revealed by CryptoQuant's btc/chart/market-data/korea-premium-index?window=DAY&sma=0&ema=0&priceScale=log&metricScale=linear&chartStyle=line” rel=”nofollow”>Korea Premium Indexwhich has been in a downward trend in the last two weeks.
bitcoin continues to hold strong
At the time of writing, bitcoin is trading at $71,095 and is up 4.31% amid increased buying momentum, with the bitcoin-open-interest-new-all-time-high-price-next/” rel=”nofollow”>bitcoin Open Interest recently reaching its all-time high. While a positive Coinbase Premium is a bullish indicator, the context around why it is happening is very important in determining where bitcoin price may go next.
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A large portion of the positive premium could be attributed to large individual holders called whales, and on-chain data shows x.com/whale_alert/status/1798705857854603337″ rel=”nofollow”>instances of huge bitcoin transfers from Coinbase to unknown private wallets.
As mentioned above, a sustained positive premium and interest from institutions and retail buyers is the most promising scenario for bitcoin moving forward. However, Coinbase whale interest alone may not be enough to fuel a prolonged and substantial price rally. For bitcoin to continue its upward trajectory, there must be a corresponding increase in the interest shown by retail investors.
Featured image created with Dall.E, chart from Tradingview.com
