Bitcoin Coinbase Premium Sees Red Plunge: BTC Rally Done?

Data shows the Bitcoin Coinbase Premium Index has plunged into the negative territory alongside the latest asset price downturn.

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Bitcoin Coinbase Premium Index Is Currently In The Red Zone

As explained by an analyst in a CryptoQuant Quicktake post, the Coinbase Premium Index has seen a decline recently. The “Coinbase Premium Index” refers to an indicator that keeps track of the percentage difference between the Bitcoin price listed on Coinbase (USD pair) and that on Binance (USDT pair).

The value of this metric tells us how the buying or selling behaviors differ between the userbases of the two cryptocurrency exchange giants.

To be more specific, Coinbase’s main traffic is US investors, especially the large institutional entities, while Binance has users from around the world, so the indicator compares the behavior of the American whales with the global ones.

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Now, here is a chart that shows the trend in the Bitcoin Coinbase Premium Index over the past week:

The value of the metric appears to have been going down over the past day | Source: CryptoQuant

The above graph shows that the Bitcoin Coinbase Premium Index has observed a sharp plunge into the negative territory during the last 24 hours. Coinciding with this drawdown in the indicator has been the crash in the cryptocurrency’s value itself.

The negative indicator suggests the asset is observing a higher amount of selling pressure on Coinbase than on Binance. Thus, given the timing of the trend, it would appear the selling from the Coinbase users has been driving the price decline.

This pattern has been observed throughout 2024; the price has shown notable correlation with the Coinbase Premium Index. As such, the Coinbase users, or the American institutional investors, have been in the driving seat.

If the indicator’s value continues to be negative in the coming days, then it’s possible that Bitcoin would only see an elongation to its decline. It only remains to be seen, though, what the US-based whales decide to do next.

In some other news, the institutional holders haven’t been the only ones participating in selling recently, as another analyst has pointed out in a Quicktake post that the Bitcoin Binary Coin Days Destroyed (CDD) has spiked.

Looks like the value of the metric has been sharply moving up in recent days | Source: CryptoQuant

The Binary CDD keeps track of whether dormant tokens are on the move. Aged coins belong to the HODLers of the market, so whenever the indicator spikes, it’s a sign that the long-term holders have potentially decided to sell their coins.

The chart shows that the Bitcoin Binary CDD has recently been flashing this signal, meaning that the asset has been facing selling pressure from the diamond hands.

BTC Price

At the time of writing, Bitcoin is floating around $100,400, down more than 3% over the past day.

The price of the coin has plunged during the last couple of days | Source: BTCUSDT on TradingView

Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com