Data shows the Bitcoin Coinbase Premium Gap has recently been going up, a sign that large US-based entities may be backing the price surge.
Bitcoin Coinbase Premium Gap Has Recently Been Green
As explained by an analyst in a CryptoQuant Quicktake post, the Coinbase Premium Gap has been following a gradual rise during the past few weeks. The “Coinbase Premium Gap” is an indicator that measures the difference between the Bitcoin price listed on Coinbase (USD pair) and that on Binance (USDT pair).
When the value of this metric is positive, it means the cryptocurrency is trading at a higher price on Coinbase than Binance. Such a trend implies the buying pressure is higher (or the selling pressure is lower) on the former as compared to the latter.
On the other hand, the indicator being negative suggests Coinbase may be facing a net higher selling pressure as the coin is going for a lower price on there than Binance.
Now, here is a chart that shows the trend in the Bitcoin Coinbase Premium Gap over the last few months:
As displayed in the above graph, the Bitcoin Coinbase Premium Gap was negative earlier, indicating that users on the platform were potentially applying more selling pressure than Binance traders. Alongside these red values, the asset’s price witnessed a decline.
Then, in mid-April, the indicator registered a reversal into the positive zone and interestingly, what accompanied this buying pressure on Coinbase was a rally in the cryptocurrency.
As such, it seems the price of the asset has recently been showing some correlation with the Coinbase Premium Gap. This isn’t a particularly new trend, as the pattern was in fact witnessed a lot throughout the last year.
Coinbase is the preferred platform of the US-based investors, particularly the large entities like institutional traders. Binance, on the other hand, hosts a global traffic. Thus, the metric can be looked at as a representation of how the behavior of the American whales differs from the rest of the sector.
Recently, the Coinbase Premium Gap has been trending up inside the positive zone, which may be a sign that the US-based large holders have been participating in accumulation.
The increase has only furthered as the price has recovered to levels near the all-time high (ATH). Considering the relevance that the American institutional investors have held for Bitcoin in the past year, this backing from them can naturally be a bullish sign for the rally’s sustainability.
That said, while there has been an extended period of buying on Coinbase lately, the premium can still be to monitor in the near future, as things can sometimes take a quick turn in the cryptocurrency sector.
BTC Price
Bitcoin has seen some pullback since its high above $110,500 as its price has returned to $108,900.
