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Data shows the Bitcoin Coinbase Premium Index remained negative during the rally to $68,000. Here’s what this might mean for inheritance.
Bitcoin Coinbase Premium Index Currently Showing Red Values
As explained by an analyst in a CryptoQuant Quicktake post, the BTC Coinbase Premium Index is in negative territory at the moment. The “Coinbase Premium Index” is an index that measures the difference between Bitcoin prices listed on the cryptocurrency exchange Coinbase (USD pair) and Binance (USDT pair).
If the value of this metric is positive, it means that the BTC price listed on Coinbase is currently higher than that on Binance. Such a trend suggests that the former is experiencing higher buying pressure (or lower selling pressure) than the latter.
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On the other hand, a negative indicator means that Coinbase users are participating in a higher level of trading than Binance, since the coin is trading at a lower price there.
Now, here is a chart showing the trend in the Bitcoin Coinbase Premium Index over the past few months:
As shown in the graph above, the Bitcoin Coinbase Premium Index has shown an interesting relationship with value until recently. It would seem that whenever the metric takes positive values, the stock will rally, and whenever it dips into negative territory, the price will also fall.
This pattern extends beyond the chart window, as the year 2024 as a whole has generally shown both moving and significant correlation. The trend naturally suggests that Coinbase users have become potential market drivers, as changes in their behavior have caused price action.
Coinbase is a popular platform for US-based investors, especially large institutional organizations, while Binance is a platform for global investors. Therefore, the index value tells us how the behavior of American whales differs from the rest of the world.
While US-based institutional investors have been key for most of 2024, the pattern appears to be different recently. The chart shows that since the recent rally in the price of Bitcoin has occurred, the price of the index has been in the red.
This is not the only pattern that has been broken, as the index turns green whenever spot exchange-traded funds (ETFs) come in. Spot ETFs have seen significant net inflows recently, but the value of the metric has not changed.
“This raises the question of whether investors in Binance, whether traders, institutions, or whales, are under pressure to buy on Coinbase Pro,” notes the quant.
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It remains to be seen if the index and price will continue to show divergence in the near future, meaning a possible shift in market structure away from Coinbase dominance, or if it is just a temporary deviation.
BTC price
Bitcoin continued its recent bullish push during the past day, as its price has now reached $68,000.
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
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