One analyst explained how on-chain indicator data could indicate that an uptrend remains for Bitcoin despite the recent pullback.
Bitcoin Coinbase Flow Pulse still points to a bull market
In new mail On X, CryptoQuant author Axel Adler Jr talked about the latest trend in Bitcoin Coinbase Flow Pulse. “Coinbase Flow Pulse” refers to an indicator that tracks the total amount of BTC flowing into Coinbase from other centralized exchanges.
Below is the chart shared by the analyst, which shows the trend in the 30-day and 90-day simple moving averages (SMAs) of this indicator over the past few years:
Looks like the two lines have both been heading up for a while now | Source: @AxelAdlerJr on X
As shown in the chart above, the Bitcoin Coinbase Flow Pulse has seen both simple moving averages (SMA) rise since early 2023, suggesting a long-term trend of increasing inflows to Coinbase from other platforms.
At present, the 30-day range is still above the 90-day range, which means that inflows continue to accelerate. From the perspective of this indicator, whenever these two lines are arranged in this way, it can be assumed that Bitcoin is in a bull market.
Periods in which this condition is true are highlighted in green on the chart. It appears that the gauge has only seen a bearish crossover a few times since this uptrend began, with each “bearish” period lasting only momentarily.
In recent days, Bitcoin price has seen some notable bearish momentum, but so far, this indicator has shown no signs of a bearish crossover. “Despite the local decline, the upward trend continues,” the analyst notes.
As for why the conversion from other exchanges to Coinbase is considered bullish, the reason lies in the type of users conducting their trading activities on the platform. Coinbase is primarily used by US-based investors, especially large institutional entities, who tend to be market movers.
The inflows to Coinbase indicate high demand from these users, which could eventually reflect on the value of the cryptocurrency. Coinbase Flow Pulse is not the only indicator used to measure demand from US investors, there is also Coinbase Premium Gap, which tells us about short-term changes in demand.
This indicator measures the difference between Bitcoin prices listed on Coinbase (USD pair) and Binance (USDT pair). Binance is used by global traffic, so the value of this metric mainly represents the difference in behavior between users in the US and globally.
Below is a chart of the one-hour version of this indicator shared by an analyst at CryptoQuant Quicktake mail.
The value of the metric appears to have gone up recently | Source: CryptoQuant
As the chart showed, the 1-hour Bitcoin Coinbase Premium Gap showed a breakout above the daily level recently, which could be a sign that buying from Coinbase users is starting to improve.
Bitcoin price
Bitcoin has taken a sideways move since its decline to start the month with its price still trading around $61,300.
The price of the coin has seen a net decline over the past few days | Source: BTCUSDT on TradingView
Featured image by Dall-E, CryptoQuant.com, chart from TradingView.com