Data from CryptoQuant revealed how institutional investors were the drivers behind Bitcoin’s recent surge above $100,000.
The Bitcoin Coinbase Premium Index has been positive recently
In new mail On X, on-chain analytics firm CryptoQuant discussed the latest trend in the Bitcoin Coinbase Premium Index. The “Coinbase Premium Index” refers to a metric that tracks the percentage difference between the BTC price listed on Coinbase (USD pair) and the Binance price (USDT pair).
The indicator tells us how buying or selling behaviors differ between the user bases of cryptocurrency exchange giants. Coinbase’s main traffic consists of US-based investors, especially large institutional entities, while Binance hosts users worldwide.
When the Coinbase Premium indicator has a positive value, the asset trades at a higher rate on Coinbase than on Binance. This trend indicates that US whales are exerting more buying pressure or less selling pressure than global investors.
On the other hand, a negative indicator indicates that Binance users might buy more than Coinbase users as the price of BTC will rise there.
Now, here is the chart shared by the analytics company that shows the trend in 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 chart above, the Bitcoin Coinbase Premium Index registered a sharp spike into positive territory at the beginning of November and has since maintained this zone, except for a brief decline.
This trend naturally means that buying pressure on Coinbase has always been higher than buying pressure on Binance. the Asset price Enjoyed a sharp rise during this period, so it also appears that this accumulation of Investors residing in the United States It fueled the boom.
The chart shows that this pattern has also been seen in multiple instances over the past year, with positive spikes in the Coinbase Premium Index generally bullish for Bitcoin.
The recent surge to a new all-time high (ATH) above $104,000 also came as the index registered another sharp green rally. Thus, US institutional investors appear to play a pivotal role in the market.
Given this pattern, the Coinbase Premium indicator is an indicator to watch soon, as new changes may once again portend the fate of Bitcoin price.
Bitcoin price
At the time of writing, Bitcoin is trading at 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 by Dall-E, CryptoQuant.com, chart from TradingView.com