Bitcoin’s price action on Coinbase has been a time test, particularly as crypto-exchange user statistics have often highlighted institutional market participation. Present bitcoin bullfighting is mainly driven by institutional demand and purchases. By extension, price activity on Coinbase and other metrics can also be considered to represent the sentiment of traders.
The Coinbase premium is a critical measure in this respect. With Bitcoin’s price narrowly limited to $50,000 at press time, the Coinbase premium turned out to be bullish, based on data from CryptoQuant.
Since the Coinbase premium has been positive, a positive shift in the price of Bitcoin can be anticipated in the short run. Here, it’s worth noting that the same metric was in the negative for a while.
In addition, the Expended Production Benefit Ratio was another measure that looked highly bullish at the time of writing.
Based on the SOPR chart from Glassnode, a bull run will make a comeback in phases. The highlighted regions in the attached map signal the points where the bottom and the top are reset. This occurred in mid-January, the last week of January, and on February 26, 2021. For the same cause, there are a few signs to watch out for, and each will help support the Bitcoin narrative.
One of the top signs is that the Coinbase premium is consistently positive. Other signs from miners include increased inflows from miners on top exchanges, with the same sold-out pressure on Bitcoin. When the selling pressure reaches its height, the price drops as it did from $58,640.
The full reset of the Bitcoin Futures funding rate is yet another warning. The funding rate was reset, based on the CryptoQuant SOPR table, with the same focus that the Bitcoin lows and tops were also reset. It is popular for traders to bet high on leverage, long credit, and thus short volume. However, the loop is complete when the volume rises and the Bitcoin price drives the leverage even higher.
Ultimately, there are other metrics, such as the Grayscale Bitcoin premium, which turned negative and signalling a decrease in institutional demand. What does this mean? That’s a tough question to answer. What is clear, nevertheless, is that the two measures give a contrasting view of Bitcoin’s price results.
358 Interactions, 4 today