By Bitcoinist - 4 months ago - Reading Time: 2 minutes
Bitcoin Coinbase Premium Shoots Up: What It Says About $45,000 Break
Data shows the Bitcoin premium on Coinbase has shot up alongside the latest rally. Here’s what this suggests about the source of the surge.
Bitcoin Coinbase Premium Gap Has Become Highly Positive
As CryptoQuant Netherlands community manager Maartunn pointed out in a new post on X, the cryptocurrency’s price observed its latest break after the Coinbase Premium Gap started rising.
The “Coinbase Premium Gap” is an indicator that keeps track of the difference between the Bitcoin prices listed on cryptocurrency exchanges Coinbase and Binance.
When the value of this metric is positive, it means that the price listed on Coinbase is currently higher than on Binance. Such a trend implies that the buying pressure from the former users is greater than that of the latter (or the selling pressure is less).
On the other hand, a negative value suggests that Binance is observing a higher buying pressure than Coinbase as the price listed there is greater.
Now, here is a chart that shows the trend in the Bitcoin Coinbase Premium Gap over the past couple of days:
As the above graph shows, the Bitcoin Coinbase Premium Gap started taking notable positive values yesterday, implying that buying pressure on the platform was soaring. Since then, the indicator has only continued to shoot further up.
Coinbase is known to be used by US-based institutional entities, so the metric’s value can provide hints about how the buying or selling pressure from these large American investors compares against that of Binance’s global user base.
Since the Coinbase Premium Gap has been positive during the past day, it would appear possible that US institutional investors have been participating in accumulation.
The chart shows that alongside the rise in the indicator’s value, the Bitcoin price has also shot up and broken past the $45,000 barrier for the first time since April 2022.
Given the timing, it could be likely that the buying pressure from the American whales has been a driver (if not the main one) for the cryptocurrency’s latest upward push.
The surge has come as the sector has kept its eyes peeled for the approval of the asset’s spot exchange-traded funds (ETFs), which many expect to happen soon. These US institutional holders could also be buying into the same hype.
Maartunn explained earlier that a correlation had emerged between the BTC spot price and Coinbase Premium Gap. This latest event shows that this correlation, held during the last month of 2023, might also continue to hold during the start of 2024.
BTC Price
Bitcoin had gone as high as $45,900 earlier during the day but has since seen a pullback towards $45,500.
Original source: Bitcoinist