Bitcoin Coinbase Premium Returns To Neutral: Buying Push Already Over?
March 26 2024 - 8:00PM
NEWSBTC
The positive Bitcoin Coinbase Premium that drove the latest rally
above $70,000 has dissipated, suggesting buying has already slowed
down. Bitcoin Coinbase Premium Gap Has Returned To Neutral Levels
CryptoQuant Netherlands community manager Maartunn explained in a
post on X that the Bitcoin Coinbase Premium Gap has declined back
toward the neutral line. The “Coinbase Premium Gap” here refers to
a metric that keeps track of the difference between the BTC prices
listed on cryptocurrency exchanges Coinbase (USD pair) and Binance
(USDT pair). Related Reading: Bitcoin Sentiment Returns To Extreme
Greed As BTC Breaks $71,000 When the value of this metric is
positive, it means that the price listed on Coinbase is greater
than that on Binance right now. Such a trend implies that the
buying pressure on the former is higher than that on the latter
platform (or alternatively, the selling pressure on there is just
lower). On the other hand, a negative value can imply the selling
pressure on Coinbase is higher than on Binance as the price of the
cryptocurrency listed there is lower. Now, here is a chart that
shows the trend in the Bitcoin Coinbase Premium Gap over the past
few days: The value of the metric appears to have been close to the
neutral line recently | Source: @JA_Maartun on X The chart shows
that the Bitcoin Coinbase Premium Gap had taken to notably positive
values as the latest upward push in the asset’s price had occurred.
Since then, though, the metric has fallen, with its value
approaching zero. It would seem that the buying pressure on the
platform contributed to the surge. The fact that the rally has
slowed since the metric returned to neutral levels may add further
evidence. This isn’t unnatural for this year, however, as the
Bitcoin price and Coinbase Premium Gap have shown a pretty tight
relationship since the start of 2024. Coinbase is popularly known
as the preferred platform of American institutional investors,
while Binance hosts more global traffic. As such, the premium’s
value provides insight into how the behavior of the US-based large
holders differs from that of world users. Since the Coinbase
Premium Gap has been the driver of the recent price surges, buying
from these institutional entities could potentially have provided
the fuel. Related Reading: Bitcoin Top In Yet? What The Legendary
MVRV Ratio Says As the indicator’s value has now neared the neutral
mark, it would imply that these whales have lifted their foot off
the gas. Given the close relationship the metric and BTC price have
held recently, it may be worth keeping an eye on how things develop
in the coming days. BTC may register some decline if the premium
flips into the red from here. Naturally, a continuation of positive
values would be a bullish sign instead. BTC Price At the time of
writing, Bitcoin is trading around the $70,100 level, up more than
11% over the past week. Looks like the value of the asset has been
going up over the last few days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, CryptoQuant.com,
chart from TradingView.com
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