Who drives the market?

Published on:

Coinbase’s premium Bitcoin gap data could indicate which part of the market is behind the weekend’s bullish price action.

Bitcoin Coinbase Premium Gap saw negative declines over the weekend

In a tiny summary of CryptoQuant postanalyst discussed the latest trend in Bitcoin Coinbase Premium Gap. “Coinbase Premium Gap” refers to an indicator that tracks the difference between the Bitcoin price quoted on Coinbase (USD pair) and the price on Binance (USDT pair).

When the indicator value is positive, it means that the asset is listed on Coinbase at a higher value than on Binance. This trend means that users of the former participate in more purchases or fewer sales compared to users of the latter.

On the other hand, the indicator value below zero suggests that Binance may be experiencing more buying pressure as the price on this market is higher than on Coinbase.

Here’s a chart shared by Quantity that shows the trend in Coinbase’s Premium Bitcoin Gap over the weekend:

The value of the metric appears to have been positive over the last few days | Source: CryptoQuant

As shown in the chart above, the Bitcoin Coinbase Premium Gap has remained in the positive area recently, but a few spikes towards the negative area stand out. Interestingly, both of these spikes were preceded by some augment in the cryptocurrency’s price, suggesting that the surge in purchases that occurred on Binance was responsible for these increases.

In addition to these spikes, the market has recently seen consistently higher buying pressure from Coinbase users, similar to most other bull phases this year. Coinbase’s main traffic is US investors, especially vast institutional players, while Binance caters to a more global user base. As such, the Coinbase premium gap reflects how the behavior of U.S. whales differs from that of global investors.

Around the time of the US presidential election results, the indicator rose to significantly positive levels as Coinbase users reacted to America-centric news.

While Coinbase users have taken the lead since then, Binance whales have not completely lost their relevance as it shows a powerful influence on price during weekends.

Time will tell how the indicator will trend in the near future as the BTC rally continues and whether further declines into negative territory will occur.

BTC price

Bitcoin briefly broke through the $82,000 level earlier in the day, setting a brand fresh all-time high. Since this peak, the coin has seen a slight decline to $81,900.

Bitcoin price chart

Looks like the price of the coin has been racing up over the last few days | Source: BTCUSDT on TradingView

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

Related

Leave a Reply

Please enter your comment!
Please enter your name here