The primary cryptocurrency exchange in the United States, Coinbase, also offers useful indicators that help us determine how investors are feeling about the market. This is especially true for the Coinbase Premium Gap, a measure of the price differential between bitcoins published on the Coinbase network and those listed on Binance, a rival exchange. This has dramatically decreased recently, indicating that the pressure on investors to sell bitcoin may be abating. Explanations
Potentially optimistic indication for bitcoin
A positive number of the Coinbase Premium Gap historically indicates that US investors are swarming to the cryptocurrency and that Coinbase has the highest price of bitcoin. Due to the American exchange’s BTC price being less than Binance’s, a negative value of the indicator indicates selling pressure on the market. With a high during the LUNA crash, this second trend has been correctly identified during the last two months.
The indicator then started to progressively move closer to zero while still indicating a negative number. Thus, after a recent bullish movement where the price of bitcoin on Coinbase reduced its gap with that of Binance, it went from -$20 to -$5. This indication shows that the selling pressure from US investors has lessened, despite the fact that it is still negative. This indicator may indicate a rise in the price of bitcoin.
Bitcoin continues to remain above $21,000.
The price of bitcoin has been relatively stable this time around after falling below $18,000 last weekend. The cryptocurrency, which had a growth of 11% over the past week, was able to maintain its position over $21,000. Traders who think that the bottom has not yet been achieved continue to express worry of a collapse despite this hopeful improvement. This idea was further supported by the Economic Daily of China, which warned that bitcoin might completely crash.
Although the current Coinbase Premium Gap figure cannot be used to forecast bitcoin’s growth, it does indicate that investor confidence in the asset is gradually returning. For the bulls who are now hopeful that the cryptocurrency can hit the crucial level of $22,000, this is the first cause for optimism.
