As an analyst with over two decades of experience in the financial markets, I have seen my fair share of market volatility and trends. The recent occurrence of Bitcoin‘s price fall accompanied by a surge in the Coinbase Premium is a fascinating development that warrants closer scrutiny.
The price of Bitcoin dropped due to a wave of selling in the cryptocurrency market, however, an especially noteworthy event took place: the Coinbase Premium significantly increased. As noted by CryptoQuant in a recent tweet, “Bitcoin’s value decreased, but the Coinbase Premium went up.
When Bitcoin significantly drops in value (as observed on Binance), it seems that American institutional investors might be taking advantage of this panic selling and adopting a more aggressive buying approach, resulting in increased premiums on platforms like Coinbase. – By @MAC_D46035
— CryptoQuant.com (@cryptoquant_com) December 10, 2024
The Coinbase Premium is a measure that represents the percentage difference between the Bitcoin prices on Coinbase Pro and Binance. A higher premium suggests increased buying demand from U.S. investors. Furthermore, Coinbase is one of the most popular spot exchanges among U.S. institutional investors.
Lately, the Coinbase Premium has displayed negative figures starting from yesterday, however, it’s quickly rebounded significantly after a substantial drop in price. It’s worth mentioning that when the premium goes into the negative zone, the market typically bounces back.
As an analyst, observing market trends, it appears that when smaller investors on Binance sell in panic, there’s a stronger likelihood that U.S. institutional investors will respond with assertive buying strategies.
Crypto market faces sell-off
On Tuesday, a gradual decline in the cryptocurrency market intensified, causing nearly every asset to dip substantially. The price of Bitcoin (BTC) sank to a minimum of $94,220 during this period, tumbling swiftly.
On December 5th, Bitcoin hit an all-time peak of $104,000 on the Coinbase platform; however, it’s been finding it tough to sustain levels above ten thousand dollars. In the past day alone, the entire cryptocurrency market has suffered a loss exceeding $200 billion.
As an analyst, I’m observing that both major tokens and midcaps encountered one of their most challenging days in recent memory today, plunging significantly during the initial trading session on Tuesday.
As a researcher, I’ve recently analyzed data from CoinGlass, which reveals that approximately $1.6 billion worth of cryptocurrency positions have been liquidated within the past 24 hours. This suggests that the highly-leveraged bets are unwinding. Furthermore, the overall market value has experienced a decrease of 3.73% in the same timeframe, now standing at approximately $3.47 trillion.
Bitcoin traded at $97,689, down 0.76% in the last 24 hours. Major cryptocurrencies like Ethereum and Dogecoin struggled to gain momentum. The collapse resulted in the liquidation of more than $1.39 billion in longs, or optimistic bets, the largest total since 2021.
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2024-12-10 14:34