The Bitcoin recent foray into $70,000 price territory has again change into a hot topic amongst investors, with many a positive price outlook. In consequence of this fascinating price motion, the overwhelming majority of long-term holders have seen their holdings cross into profit zone. Particularly, the positive outlook appears to be positive amongst US-based investors, as shown by the Coinbase premium turning positive. Some see the return of the Coinbase premium as a bullish signal that might proceed to drive the value higher.
Coinbase Premium Index Flips Positive
The Coinbase Premium Index (CPI), which had been trading within the negative since May 18, has now turned positive, in line with a cryptocurrency analyst who cited data from CryptoQuant. The Coinbase Premium refers back to the difference in Bitcoin’s price on Coinbase versus other major exchanges.
Related Reading
When the premium turns positive, it means Bitcoin is trading at the next price on Coinbase in comparison with Binance and, subsequently, other major crypto exchanges. This is essential since it shows increased demand for Bitcoin on certainly one of the biggest US-based crypto exchanges. Then again, a negative premium indicates a scarcity of considerable buying pressure from US-based traders.
Since Coinbase is a preferred entry point for brand new US crypto investors, a premium price indicates money is flowing into Bitcoin. On the time of writing, data from CryptoQuant shows that this premium recently reached 13.11. While this will seem small, it definitely indicates the start of shopping for pressure that might send Bitcoin on one other leg higher
Interestingly, this flip right into a positive Coinbase premium has include a less bullish outlook on Bitcoin amongst Korean and Asian-based investors, a minimum of within the short term. This information is revealed by CryptoQuant’s Korea Premium Index, which has been on a downtrend previously two weeks.
Bitcoin Continues To Hold Strong
On the time of writing, Bitcoin is trading at $71,095 and is up by 4.31% amidst increased buying momentum, with the Bitcoin Open Interest recently reaching its all-time high. While a positive Coinbase Premium is a bullish indicator, the context around why it’s happening matters greatly in determining where Bitcoin’s price may go next.
Related Reading
A big a part of the positive premium may very well be attributed to individual large holders called whales, with on-chain data showing instances of giant Bitcoin transfers from Coinbase to unknown private wallets.
As mentioned earlier, a sustained positive premium and interest from institutions and retail buyers is essentially the most promising scenario for Bitcoin to construct on. Nevertheless, interest from Coinbase whales alone will not be enough to fuel a chronic, substantial price rally. For Bitcoin to proceed its upward trajectory, there have to be a corresponding rise within the interest shown by retail investors.
BTC price rises to $71,500 | Source: BTCUSD on Tradingview.com
Featured image created with Dall.E, chart from Tradingview.com