Bitcoin Buying Over? Coinbase Premium Turns Red After $98,000 High

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As a seasoned analyst with over two decades of experience in the financial markets, I must say that this recent plunge in the Bitcoin Coinbase Premium Gap is indeed intriguing. The indicator has been a reliable barometer for BTC price action throughout 2024, and its current dip into negative territory could potentially signal a pause in the rally we’ve been witnessing.

The data indicates that the gap between the price of Bitcoin on Coinbase and its market value has dipped below zero after Bitcoin surpassed $98,000, reaching a new peak.

Bitcoin Coinbase Premium Gap Has Just Observed A Plummet

According to a recent analysis by Maartunn from the CryptoQuant community, the gap between Bitcoin’s price on Coinbase compared to Binance has vanished. This “Coinbase Premium Gap” is an indicator that shows the variation in Bitcoin prices between Coinbase (using USD) and Binance (utilizing USDT).

If the given metric shows a positive value, it means the Bitcoin price on Coinbase is currently higher than on Binance. This situation suggests that there’s more demand for buying (or less supply for selling) Bitcoin on Coinbase compared to Binance.

In a different perspective, the fact that the indicator is below zero implies that Binance might be experiencing stronger buying demand since Bitcoin is being traded at a premium compared to Coinbase.

Currently, let’s take a look at this graph illustrating the changing Bitcoin Coinbase Premium Spread over the past few days.

Based on the graph, we can see that the Bitcoin Coinbase Premium Gap has been positive for the past two days, suggesting strong demand or buying pressure on the platform.

At the same time as these purchases, Bitcoin reached a brand-new peak (highest value ever recorded) of over $98,000. However, since then, its value according to this indicator has decreased slightly, and it’s even dipped briefly into negative territory.

In many instances throughout 2024, the Coinbase Premium Gap has played a significant role in fueling positive Bitcoin price movements. When this gap exhibits negative values, it usually isn’t a favorable indicator for the asset.

Coinbase is the main platform for American investors, especially large institutional entities, while Binance has users worldwide. As such, the Coinbase Premium Gap tells us how US-based whales differ in behavior from offshore ones.

Due to the strong connection between the metric and Bitcoin this year, it appears that major American investors are leading the market. As the indicator weakens towards neutral-negative readings, these investors might have finished their purchasing spree. If this is the case, Bitcoin’s upward trend could experience a temporary halt.

As a crypto investor, I’m closely monitoring this key indicator, understanding that circumstances can shift rapidly. A flip to positive values might serve as a go-ahead signal, prompting me to prepare for an uptrend.

In a separate news piece, it’s been reported that a cryptocurrency transaction involving 500 Bitcoins was made by a whale, which was highlighted by Maartunn in a recent Reddit post.

Typically, large-scale coin transfers suggest that experienced traders in the market are planning to cash out. This recent transaction, involving a value exceeding $49 million, might just be a ‘whale’ cashing in on their substantial gains.

BTC Price

When writing, Bitcoin is trading at around $98,000, up over 10% in the last seven days.

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2024-11-21 23:27