Bitcoin Rebounds as Buying Pressure Returns on Coinbase
Bitcoin has experienced a notable recovery in the past day, as data suggests that buying pressure has returned on the cryptocurrency exchange Coinbase.
Bitcoin Coinbase Premium Turns Positive
The Bitcoin Coinbase Premium Gap, which measures the difference between BTC prices on Coinbase and Binance, has surged back into positive territory. This indicates a shift in buying behaviors between the userbases of the two platforms.
The Coinbase platform is preferred by institutional entities based in the US, while Binance caters to global investors. The premium value can provide insights into whether American traders are buying more or less compared to global investors on Binance.
Chart: Bitcoin Coinbase Premium Gap
The chart above shows that the Bitcoin Coinbase Premium Gap had turned significantly red earlier, coinciding with a steep decline in BTCโs value to $60,600. This suggests that selling pressure from American institutional investors may have contributed to the drawdown.
This trend aligns with observations throughout this year, where the Coinbase Premium Gap has influenced BTCโs price action. The post-ETF environment seems to be notably influenced by institutional entities.
In the past day, the indicator has turned green again, indicating buying pressure and resulting in a sharp recovery for Bitcoin.
Influence of US Federal Reserve
These positive premium levels coincide with the US Federal Reserveโs announcement that interest rates will remain unchanged for now and that there will be three cuts in the year ahead.
Given the relationship between the Bitcoin spot price and Coinbase Premium Gap in the first quarter of 2024, it is worth monitoring the metric for any changes that may impact the asset.
If the current positive values of the indicator persist, it is likely that Bitcoin will continue its surge, as it would indicate support from large investors.
Bitcoin Price Recovery
Since the Coinbase Premium Gap turned positive, Bitcoin has managed to climb back towards the $67,000 level.
Chart: Bitcoin Price
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