Data indicates that the Bitcoin Coinbase Premium Index has fallen into negative territory along with the recent decline in asset prices.
The Bitcoin Coinbase Premium indicator is currently in the red zone
As one of the analysts at CryptoQuant Quicktake explained mailThe Coinbase Premium Index has seen a decline recently. “Coinbase Premium Index” refers to an index that tracks the percentage difference between the price of Bitcoin listed on Coinbase (USD pair) and the Binance price (USDT pair).
The value of this metric tells us how buying or selling behaviors differ between the user bases of a cryptocurrency exchange giant.
To be more specific, the main traffic for Coinbase is American investors, especially large institutional entities, while Binance has users from all over the world, so the indicator compares the behavior of American whales with the behavior of global whales.
Now, here’s 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 chart above shows that the Bitcoin Coinbase Premium Index has seen a sharp decline into negative territory over the past 24 hours. Simultaneously with this decline in the index, there was a collapse in the value of the cryptocurrency itself.
A negative indicator indicates that the asset is observing more selling pressure on Coinbase than on Binance. Thus, given the timing of the trend, it appears that it was selling from Coinbase users that drove the price down.
This pattern has been observed throughout 2024; The price showed a significant correlation with the Coinbase Premium Index. As such, Coinbase users, or US institutional investors, were in the driving seat.
If the indicator value continues to be negative in the coming days, Bitcoin will likely only see an extension of its decline. However, it remains to be seen what the US-based whales decide to do next.
In some other news, institutional holders weren’t the only ones participating in the selling recently, as another Quicktake analyst noted. mail The days of Bitcoin’s binary destructive system (CDD) are over.
Looks like the value of the metric has been sharply moving up in recent days | Source: CryptoQuant
The binary CDD tracks whether dormant tokens are in motion or not. Old coins belong to HODLers in the market, so whenever the index rises, it is a sign that long-term coin holders have decided to sell their coins.
The chart shows that Bitcoin Binary CDD recently triggered this signal, which means the asset is facing selling pressure from diamond hands.
Bitcoin price
At the time of writing, Bitcoin was trading 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 by Dall-E, CryptoQuant.com, chart from TradingView.com
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