Data shows that the recent decline in asset prices has pushed the Bitcoin Coinbase Premium Index into negative territory.
Bitcoin Coinbase Premium Index is currently in the red zone
As explained by the analyst in the CryptoQuant Quicktake post, the Coinbase Premium Index has been declining recently. “Coinbase Premium Index” refers to an index that tracks the percentage difference between the Bitcoin price listed on Coinbase (USD pair) and the Bitcoin price listed on Binance (USDT pair).
The value of this metric shows how buying and selling behavior differs between the user bases of the two largest crypto exchanges.
More specifically, Coinbase's main traffic is US investors, especially large institutional groups, whereas Binance has users all over the world, so the index compares the behavior of US whales with that of global whales. Compare your actions.
Here is a chart showing the trend of the Bitcoin Coinbase Premium Index over the past week.
The value of the metric appears to be decreasing over the past day. Source: CryptoQuant
The graph above shows that the Bitcoin Coinbase Premium Index has observed a sharp plunge into negative territory over the past 24 hours. Coinciding with this drawdown of indicators, the value of cryptocurrencies themselves collapsed.
Negative indicators suggest that this asset is observing stronger selling pressure on Coinbase than on Binance. Therefore, given the timing of the trend, it looks like Coinbase user selling is causing the price decline.
This pattern is observed throughout 2024. The price shows a significant correlation with the Coinbase Premium Index. So Coinbase users, American institutional investors, have taken the lead.
If the value of the indicator remains negative in the coming days, Bitcoin’s decline may continue further. But it remains to be seen what the US-based whale will do next.
In other news, only institutional investors have been participating in the sell-off recently, as another analyst pointed out in a post on Quicktake that Bitcoin's binary coin destruction days (CDD) has skyrocketed. That is not the case.
The value of the metric seems to have risen sharply in recent days | Source: CryptoQuant
Binary CDD tracks whether dormant tokens are in motion. Expired coins belong to market hodlers, so whenever the indicator spikes, it indicates that long-term holders may have decided to sell their coins.
The chart shows that Bitcoin Binary CDD has been flashing this signal recently. This means the asset is under selling pressure from the diamond hand.
BTC price
At the time of writing, Bitcoin was hovering around $100,400, having fallen more than 3% in the past day.
The price of the coin has plummeted over the past few days. Source: BTCUSDT on TradingView
Dall-E, Featured Image from CryptoQuant.com, Chart from TradingView.com
