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).
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.
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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