Emily Walker
Recent data indicates that the Bitcoin Coinbase Premium Index has dropped into negative territory during the recent decline in asset prices.
Current Status of the Bitcoin Coinbase Premium Index
An analyst from a CryptoQuant Quicktake article explains that the Coinbase Premium Index has been trending downward. This index measures the difference in percentage between Bitcoin prices on Coinbase (in USD) and Binance (in USDT).
This metric provides insight into how the buying and selling activities vary between users of these two prominent cryptocurrency exchanges.
Specifically, Coinbase attracts primarily US investors, especially large institutional ones, while Binance serves a global clientele. Therefore, the index reflects the selling patterns of American investors compared to those from around the world.
Below is a chart illustrating the Bitcoin Coinbase Premium Index’s movements over the past week:
The chart indicates a significant drop into negative values for the Bitcoin Coinbase Premium Index within the last 24 hours, coinciding with a fall in the cryptocurrency’s price.
This negative trend points to increased selling pressure on Coinbase compared to Binance, suggesting that the selling by Coinbase users has been a contributing factor to the price decline.
This trend appears consistent throughout 2024, with the Bitcoin price showing a close correlation to the Coinbase Premium Index. Therefore, it seems American institutional investors have been heavily influencing market movements.
If this negative trend continues in the upcoming days, Bitcoin may experience further declines. It remains to be seen what actions US-based investors will take next.
Additionally, institutional investors are not the only ones selling; another analyst noted in a Quicktake post that there has been a spike in Bitcoin’s Binary Coin Days Destroyed (CDD).
Binary CDD tracks the movement of previously dormant coins. When this indicator rises, it usually signals that long-term holders are deciding to sell their assets.
The recent data shows that the Bitcoin Binary CDD is indicating increased selling activity from long-term holders.
Current Bitcoin Price
At present, Bitcoin is trading around $100,400, reflecting a drop of over 3% in the last 24 hours.