The data indicates a decline in Bitcoin selling pressure on the crypto exchange Coinbase, potentially paving the way for a temporary rebound.
The Bitcoin Coinbase Premium Gap is Once Again Nearing the Neutral Mark
After falling into negative territory yesterday, the Coinbase Premium Gap has increased, as analyst Maartunn detailed in a post on X. A measure that monitors the variation in Bitcoin prices posted on Coinbase (USD pair) and Binance (USDT pair) is referred to as the "Coinbase Premium Gap" in this context.
When this indicator's value is positive, it indicates that the price of bitcoin posted on Coinbase is now higher than that listed on Binance. A pattern like this suggests that there is more buying pressure (or less selling pressure) on the former than the latter.
Conversely, a negative figure would indicate that the selling pressure on Coinbase might surpass that of Binance, given that the asset is trading at a lower price on the former exchange.
Coinbase is widely recognized as the preferred platform for institutional investors based in the US, while Binance caters to a global audience. Therefore, the premium's value can offer insights into the behavior of significant American investors.
The recent negative readings of the indicator naturally suggest that these major entities have been involved in selling activities. However, when the selling pressure eventually subsided and the Coinbase Premium Gap reversed, there was a short-term resurgence in the cryptocurrency's price. In the past day, the indicator has exhibited a similar pattern, nearing the neutral level.
This could indicate that institutional traders might have concluded their selling for the time being. An analyst highlights, "This could potentially create some short-term upside opportunity."
In recent updates, Bitcoin's Open Interest, which gauges the total value of derivative positions active for the asset, has surged significantly in the past few hours, as highlighted by Maartunn in another recent post.
Typically, a rise in open interest tends to correlate with increased volatility in Bitcoin's prices. This sudden 9% uptick indicates a notable development, potentially signaling an imminent and abrupt liquidation event for the cryptocurrency.
May 2024, Cryptoniteuae