Data from CryptoQuant has revealed how institutional investors have been the driving force behind Bitcoin’s latest spike above $100,000.
Bitcoin Coinbase Premium Index has been positive lately
In a new after on X, on-chain analytics company CryptoQuant discussed the latest trend in the Bitcoin Coinbase Premium Index. The “Coinbase Premium Index” refers to a statistic that tracks the percentage difference between the BTC price listed on Coinbase (USD pair) and that on Binance (USDT pair).
The indicator tells us how buying and selling behavior differs between the user bases of these cryptocurrency exchange giants. Coinbase’s main traffic is US-based investors, especially large ones institutional entitieswhile Binance hosts users all over the world.
When the Coinbase Premium Index has a positive value, the asset is trading at a higher price on Coinbase than on Binance. Such a trend implies that American whales have exerted greater buying or lower selling pressure than the global investors.
On the other hand, the negative indicator suggests that Binance users may be buying more than Coinbase users because BTC is going for a higher price there.
Here is the chart shared by the analytics company showing the trend in the Bitcoin Coinbase Premium Index over the past year:
The value of the metric appears to have been quite positive in recent weeks | Source: CryptoQuant on X
As shown in the chart above, the Bitcoin Coinbase Premium Index registered a sharp rise into positive territory in early November and has remained within this territory since then, except for a brief dip.
This trend obviously means that buying pressure on Coinbase has been consistently higher than on Binance. The the price of the asset enjoyed one sharp rally during this period, so it also appears that this accumulation is proceeding US-based investors fueled the wave.
The chart shows that this pattern has also been observed several times over the past year, with positive spikes in the Coinbase Premium Index generally being bullish for Bitcoin.
The latest rally to the new all-time high (ATH) above $104,000 also occurred when the indicator recorded another sharp green peak. American institutional investors therefore appear to play a crucial role in the market.
Given this pattern, the Coinbase Premium Index is obviously an indicator to watch soon, as new changes could once again predict the fate of Bitcoin’s price.
BTC price
At the time of writing, Bitcoin is trading around $100,800, up more than 6% in the past week.
Looks like the price of the coin has observed a sharp surge during the past day | Source: BTCUSDT on TradingView
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com