Data from CryptoQuant revealed that institutional investors were the driving force behind Bitcoin’s recent surge above $100,000.
Bitcoin Coinbase Premium Index Has Been Positive Recently
In a new post on X, on-chain analytics company CryptoQuant discussed recent trends in the Bitcoin Coinbase Premium Index. “Coinbase Premium Index” refers to a metric that keeps track of the percentage difference between the BTC price listed on Coinbase (USD pair) and that on Binance (USDT pair).
The indicator tells us about how the buying or selling behavior differs between the user bases of these crypto exchange giants. Coinbase’s main traffic consists of US-based investors, mainly large institutional organizations, while Binance hosts users around the world.
When the Coinbase Premium Index has a positive value, the asset trades at a higher price on Coinbase than on Binance. Such a situation means that American whales have been applying more buying pressure or less selling pressure than global investors.
On the other hand, the negative indicator suggests that Binance users may be buying more than Coinbase users as BTC is moving at a higher price there.
Now, here’s a chart shared by the analytics company that shows the index on 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 graph above, the Bitcoin Coinbase Premium Index registered a sharp rise in positive territory at the beginning of November and since then has been kept within this zone, save for a brief dip.
This trend naturally means that the buying pressure on Coinbase has always been higher than on Binance. I commodity price enjoy a sharp rally at this time, so it will appear that this collection from Investors based in the US fueled the expansion.
The chart shows that this pattern has been repeated many times over the past year, and positive spikes in the Coinbase Premium Index are generally bullish for Bitcoin.
The recent all-time high (ATH) rally above $104,000 also came as the index registered another sharp spike in the green. Therefore, American institutional investors seem to play an important role in the market.
Given this pattern, the Coinbase Premium Index is naturally an indicator to watch soon, as new changes may also signal the fate of Bitcoin’s price.
BTC price
At the time of writing, Bitcoin is trading around $100,800, up more than 6% over 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
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