The data shows that the Bitcoin Coinbase Premium Index has entered negative territory alongside the recent decline in asset prices.
The Bitcoin Coinbase Premium Index is Currently in the Red Zone
As explained by an analyst in a CryptoQuant Quicktake post, the Coinbase Premium Index has seen a decline recently. “Coinbase Premium Index” refers to an index that keeps track of the percentage difference between the Bitcoin price listed on Coinbase (USD pair) and that on Binance (USDT pair).
The value of this metric tells us how the buying or selling behavior differs between the user base of the two cryptocurrency exchange giants.
To be more specific, the main traffic of Coinbase is US investors, especially large institutional organizations, while Binance has users from all over the world, so the index compares the behavior of American and global whales.
Now, here is a chart showing the trend in the Bitcoin Coinbase Premium Index over the past week:
The value of the metric appears to have been going down over the past day | Source: CryptoQuant
The graph above shows that the Bitcoin Coinbase Premium Index has seen a sharp decline in negative territory over the past 24 hours. Accompanying this drop in performance has been a crash in the value of the cryptocurrency itself.
A negative indicator suggests that the asset is looking at a higher amount of selling pressure on Coinbase than on Binance. So, given the time of the trend, it seems that sales from Coinbase users have been driving the price down.
This pattern was observed throughout the year 2024; the price showed a significant correlation with the Coinbase Premium Index. Therefore, Coinbase users, or American institutional investors, have been driving.
If the value of the index continues to be negative in the coming days, then it is possible that Bitcoin will only see an upside to its downside. However, it remains to be seen what US whalers decide to do next.
In other news, institutional owners have not been the only ones involved in the recent sell-off, as one analyst revealed in a Quicktake post that Bitcoin Binary Coin Days Destroyed (CDD) has increased.
Looks like the value of the metric has been sharply moving up in recent days | Source: CryptoQuant
Binary CDD tracks which dormant tokens are in transit. Old coins are HODLers in the market, so whenever the index rises, it is a sign that long-term holders have decided to sell their coins.
The chart shows that the Binary Binary CDD recently flashed this signal, which means that the asset has been facing selling pressure from diamond hands.
BTC price
At the time of writing, Bitcoin is floating around $100,400, down more than 3% over the past day.
The price of the coin has plunged during the last couple of days | Source: BTCUSDT on TradingView
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
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