On-chain data shows the Bitcoin coinbase premium gap has improved recently and is now approaching a neutral value, suggesting the selling pressure may be drying up.
Bitcoin Coinbase Premium Gap Close To Zero, But Still Negative
As pointed out by an analyst in a CryptoQuant post, the selling pressure from US investors seems to have reduced in recent days.
The “Coinbase Premium Gap” is an indicator that measures the difference in the Bitcoin prices listed on crypto exchanges Coinbase (USD pair) and Binance (USDT pair).
The quant notes that US investors are known to use the Coinbase platform, especially high-net entities and institutions.
When the value of this metric is positive, it means the price on Coinbase is higher at the moment. Such a trend suggests there has been buying from US investors recently.
Related Reading | Bitcoin Whale Presence On Derivatives Still High, More Volatility Ahead?
On the other hand, a negative premium gap implies there has been some selling on the crypto exchange as the price is lesser than on Binance.
Now, here is a chart that shows the trend in the Bitcoin Coinbase premium gap over the year 2022 so far:
The value of the metric looks to be negative right now | Source: CryptoQuant
As you can see in the above graph, the Bitcoin Coinbase premium gap has been negative in the last couple of months.
During the LUNA crash, it reached a highly red value of $131, which means there was some heavy selling from US investors then.
During the consolidation period that followed, as well as during the latest crash, the value of the indicator moved sideways around a negative $20.
Related Reading | Is Bitcoin Like Buying Google Early? Check Out The Shocking Comparison
Over the last few days, however, the trend seems to have changed and the premium gap is now observing some upwards movement.
While the indicator still has a negative value, it’s quite close to zero now as the gap between Coinbase and Binance stands at just -$5.
This shows that the selling pressure from US investors has been dying down recently, a sign that could prove to be bullish for the price of Bitcoin.
At the time of writing, Bitcoin’s price floats around $21.2k, up 11% in the last seven days. Over the past month, the crypto has lost 28% in value.
The below chart shows the trend in the price of the coin over the last five days.
Looks like the value of the crypto has been going up over the last few days | Source: BTCUSD on TradingView
Since the low below $18k, Bitcoin has been trying to gradually make some recovery. However, the crypto is currently finding it difficult to leave the $21k level.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com
Credit: Source link