Data shows that the Bitcoin Coinbase Premium Index has soared lately, suggesting that it could be at least partially behind the latest price increase.
Bitcoin Coinbase Premium Index has now taken notable positive values
As Julio Moreno, head of CryptoQuant Research, noted in a new one after at X, the BTC Coinbase Premium Index recently shot into positive territory. The “Coinbase Premium Index” here refers to an indicator that tracks the percentage difference between Bitcoin prices listed on Coinbase (USD pair) and Binance (USDT pair).
Related literature: US Platforms Regain Dominance in Bitcoin Holdings: Is This Bullish?
When the value of this metric is positive, it means that the asset is currently trading at a higher price on Coinbase than on Binance. Such a trend indicates that the former experience higher buying pressure or lower selling pressure than the latter. On the other hand, the fact that the indicator is below zero means that the Coinbase users are participating in a larger number of sales compared to the Binance users at the moment.
Here is the chart shared by Moreno showing the trend in the Bitcoin Coinbase Premium Index over the past few weeks:
The value of the metric appears to have surged into the positive region recently | Source: @jjcmoreno on X
As visible in the chart above, the Bitcoin Coinbase Premium Index had previously entered negative territory, but with the last rally there is a sharp increase in the price of the asset, back to the positive region. This would indicate that the Coinbase investors participated in the accumulation and it may be this purchase that is at least partially responsible for the coin’s rise.
Coinbase is the main platform for US-based investors, especially the large institutional entities, while Binance serves a global traffic. As such, the Coinbase Premium Index essentially reflects the difference in behavior between US investors and the rest of the world.
In 2024, the cryptocurrency has closely followed this indicator so far, implying that the US-based whales have been driving the price action. So it is not unexpected that the same trend continues for the new rally.
The Coinbase Premium Index is currently on the rise, but we may need to keep an eye on it in the near future as its value could turn around quickly. And if it does, BTC could also experience bearish tailwinds, as it has done many times this year.
In other news, Bitcoin is now approaching finals cost basis short term holder cohort, as CryptoQuant author Axel Adler Jr discussed in an X after.
The Realized Price of the various short-term holder segments | Source: @AxelAdlerJr on X
This segment of short-term holders, who purchased their coins between three to six months ago, currently has an average cost basis of $66,300. If Bitcoin can surpass this level, all short-term holders (i.e. those who purchased in the last six months) would be back in the green.
BTC price
At the time of writing, Bitcoin is trading around $65,700, up more than 3% in the past week.
Looks like BTC has been on the way up over the last few days | Source: BTCUSDT on TradingView
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com