Bitcoin
Buy or sell Bitcoin? Quant Reveals What Key Metrics Say – TradingView News
A quant explained what a potential leading Bitcoin indicator could say about what comes next for the cryptocurrency’s price.
Bitcoin Coinbase Premium Could Be the Answer to the Future of BTC
In a CryptoQuant Quicktake post, an analyst talked about the trend currently taking place in Bitcoin Coinbase Premium. “We can use the Coinbase Premium trend as a leading indicator of the future direction of BTC price,” notes the quant.
“Coinbase Premium” is a metric that monitors the difference between the price of Bitcoin listed on cryptocurrency exchanges Coinbase (USD pair) and Binance (USDT pair).
When the value of this indicator is positive, it means that the price listed on Coinbase is higher than that on Binance at the moment. Such a trend suggests that buying pressure is greater (or selling pressure is lower) on the first platform than on the second.
On the other hand, the negative premium implies that Coinbase may be seeing a greater amount of selling than Binance, as the asset is currently trading at a lower price there.
Now, here is a chart showing the trend of Bitcoin Coinbase Premium’s 30-day moving average (MA) over the past two years:
NewsBTC
As shown in the chart above, the 30-day Bitcoin Coinbase Premium MA has been positive recently, suggesting that Coinbase users have supported the asset during the rally.
Coinbase is popularly known as the platform of choice for US-based institutional entities, while Binance has a more global user base. As such, the value of the prize could provide clues about how the behavior of American whales differs from the rest of the world.
From the chart, it is visible that the buying pressure from these institutional traders peaked along with the price top, but has since been decreasing. The metric remains positive overall, although it is now quite close to the neutral zero mark.
In the chart, the quant highlighted an interesting pattern that the cryptocurrency has followed in relation to Coinbase Premium over the past two years. It appears that whenever the indicator bottomed out in negative territory and reversed into an uptrend, the coin price observed a recovery.
An example of this trend also occurred at the beginning of the year, when a reversal in the indicator led Bitcoin to observe a rally in which the asset would eventually break its all-time high.
Coinbase Premium is currently in a downtrend but has not yet entered negative territory. The analyst explains that BTC is in a “wait and see” phase, where recovery may take a little longer. The metric must first decline further and reach a reversal point, at least if the historical pattern is to repeat.
BTC Price
Bitcoin fell below $61,000 previously, but the asset found a slight recovery the day before, returning above $62,700.