As a seasoned researcher with years of experience delving into the intricacies of the cryptocurrency market, I find myself intrigued by today’s developments. The Coinbase Premium ratio in the red zone while Bitcoin (BTC) surges again is indeed a rare pattern that usually indicates strong buying pressure on Binance (BNB), as suggested by analyst Avocado Onchain.
As an analyst, I find myself observing a noteworthy situation: The Coinbase Premium ratio has dipped into the ‘red zone’, yet Bitcoin (BTC) prices are climbing once more. This unique pattern could be pointing towards robust buying pressure on Binance, the globe’s leading cryptocurrency exchange in terms of trading volume.
Bitcoin (BTC) buying pressure on Binance (BNB) confirmed as Coinbase Premium in red zone
On September 20, 2024, the premium metrics of Coinbase saw a dip to their lowest levels in weeks. Simultaneously, Bitcoin’s price experienced a mini-surge, which according to an anonymous cryptocurrency analyst known as Avocado Onchain, indicates growing optimism among investors towards Binance (BNB).
When Bitcoin’s price is rising and yet the cost of Bitcoin on Coinbase is lower than its value on Binance, it indicates that buyers on Binance are exerting significant demand or pressure to buy Bitcoin. This observation was made by @avocado_onchain.
— CryptoQuant.com (@cryptoquant_com) September 20, 2024
Researchers monitor the gap between the Bitcoin price on Coinbase Pro compared to Binance, often referred to as the Coinbase Bitcoin Premium Index, to gauge short-term investor sentiment.
When Coinbase Pro investors are dealing in a negative market, they are able to buy Bitcoin (BTC) at lower prices compared to their international counterparts. This usually takes place during a decline in BTC price, however, the current scenario seems to defy this trend as it appears the price is increasing instead.
The analyst points out that Bitcoin’s (BTC) price could potentially surge as the Fear of Missing Out (FOMO) spreads across different parts of the world.
Essentially, when the Coinbase Premium is negative yet Bitcoin’s price isn’t decreasing, it indicates a high demand for Bitcoin on Binance, as people are actively purchasing more than the supply available.
Previously reported by U.Today, an analyst noticed an uncommon “triangular convergence” pattern, suggesting a bullish trend, in the Coinbase Premium chart last week.
Bitcoin (BTC) futures: Institutions done shorting?
In summary, the researcher seems to be optimistic since Bitcoin (BTC) is making efforts to maintain its position above the $63,500 mark on prominent trading platforms.
As a crypto investor, I recently took note of some encouraging data shared by CryptoQuant CEO Ki Young Ju regarding CME futures open interest figures. The rising numbers suggest a growing institutional interest in the cryptocurrency market, which could potentially drive prices upward.
Over the last five months, institutions have significantly reduced their short positions on Bitcoin when trading CME futures. This reduction amounts to a decrease of 75%.
— Ki Young Ju (@ki_young_ju) September 19, 2024
As he mentioned, it appears that major institutions may no longer be heavily selling Bitcoin futures.
For the first time in over three weeks, the Bitcoin Fear & Greed Index moved into the ‘neutral’ region, reaching a score of 54 out of 100, according to recent data.
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2024-09-20 17:44