According to an on-chain analyst, Bitcoin is seeing a shift in investor behavior in one of its major markets, the United States. This shift in market dynamics, according to a market analyst, could be key to sustaining the major cryptocurrency’s continued rise.
Coinbase Premium turns positive after prolonged weakness
In an April 25 post on X, Darkfost Highlight US institutional and professional investors have returned to the Bitcoin market, and the price appears poised to rise further. The relevant indicator here is the Hourly Coinbase Premium metric.
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For context, this metric tracks the hourly price difference between Bitcoin on Coinbase and Binance to indicate whether institutional-driven demand is pushing prices higher, as opposed to retail-driven markets. Importantly, the version of the Coinbase Premium index being analyzed is volume-weighted.
This means that larger trades have a greater impact on the account, which helps filter out the “noise” of the market.
Darkfost noted that the Coinbase Premium indicator is somewhat positive. However, what is notable about this turnaround is that this trend towards positivity has been continuing since the beginning of April – and interestingly, it began after a long period spent in negative territory.
In essence, this shift indicates that the price of Bitcoin is trading at a higher price on Coinbase than on Binance. Hence, this trend often Indicates stronger institutional involvementsince Coinbase is usually preferred by institutions and professional investors in the United States.
This is because although Binance is still one of the largest cryptocurrency exchanges globally, it is generally seen as more accessible to retail traders. On the other hand, Coinbase has a reputation for meeting the needs of institutional clients and providing regulatory clarity and infrastructure to large-scale investors. As such, Coinbase price premiums are often viewed as a way to gauge institutional sentiment.
Coinbase Premium Can Maintain BTC’s Bullish Momentum
Darkfost further explained that the renewed buying pressure from US investors comes at a critical time for the market. This is supported by historical data: rallies driven by institutional demand tend to be more stable than those driven mostly by retail speculation.
However, since the Coinbase Premium indicator has not yet completely turned into an uptrend, it is advisable to monitor clear signals rather than randomly getting involved in the fray. As such, Darkvost stated that rather than just Bitcoin price, he would also be monitoring further upside for the index.
As of this writing, Bitcoin is trading at $77,525, with CoinGecko data showing that the leading cryptocurrency barely moves on a daily basis.
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Featured image from iStock, chart from TradingView
