The latest analysis from BaroVirtual, CryptoQuant’s analyst, provides a vague view of the current state of the Bitcoin market.
According to the analyst, Coinbase’s price volatility—the main metric that tracks the price difference between Bitcoin on Coinbase and other exchanges—can provide valuable insight.
Sales Profits and Fees: A Double-Edged Sword
Rising or higher premiums on Coinbase generally suggest strong buying pressure, indicating strong medium-term sentiment for Bitcoin. However, BaroVirtual warns that in the short term, these high premiums may present a double-edged sword, as they often precede localized downward movements in the price of Bitcoin.
This situation stems from market volatility, as higher premiums indicate an increase in demand that can lead to overheating. When this happens combined with a high number of short positions available and an excessive number of long contracts, the risk of a market reversal increases.
Notably, BaroVirtual pointed out that this trend has been seen in other Asian exchanges, where aggressive trader conditions and advanced setups increase market risk.
The analyst’s view extends beyond Coinbase’s premium to the broader market context. When premiums rise, they reflect strong demand and positive sentiment among investors. This could give Bitcoin price space, strengthen support levels and create bullish sentiment in the medium term.
However, over time, the influx of high-quality selling positions can upset the market balance, leading to a sharp correction. A higher ratio means that even a small price change can force a liquidation, exacerbating a price decline.
CryptoQuant’s analyst emphasized leverage dynamics’ major role in determining the sustainability of bullish trends. The aggressive stance of traders in other Asian countries shows a growing appetite for risk, which could lead to sudden market changes if sentiment changes or if premiums fall.
Bitcoin Approaches $100,000
After a previous trade above $83,000 earlier today, the price of Bitcoin has now moved forward. So far, BTC has achieved a recent high (ATH) of $84,929 less than an hour ago. However, the stock has seen a slight correction to the current trading price of $84,929, at the time of writing.
Regardless of this slight pullback, and the current bullish momentum in Bitcoin, it is clear that the asset could continue this rally and rise above $85,000 soon, bringing it closer to the six-digit ATH of $100,000 and beyond.
A famous crypto analyst known as Javon Marks on X has highlighted that Bitcoin “still has a lot of hurdles ahead” especially since it recently broke above the expanding bullish pattern.
Values of $BTC (Bitcoin), after breaking out of this bearish wedge pattern, has been going up a LOT, going about +24% since then but there is still a lot more to come!
The estimated breakout target is another close to 20% away from the $100,000 mark and… pic.twitter.com/k0bv9xqUwK
– JAVON
The featured image was created with DALL-E, a Chart from TradingView