Bitcoin Coinbase Premium Turns Good After 10 Weeks. Is US Demand Finally Coming Back?
Recent Bitcoin price action may show its first signs of Relief as a closely watched indicator of US demand has recently changed direction. The Coinbase Premium Gap has returned to positive territory following nearly 10 weeks of persistent negative readings, which coincided with Bitcoin’s decline from around $95,000 to below $65,000 in February.
Coinbase Premium Turns Good
The Coinbase Premium Gap, which measures the price difference between Bitcoin on Coinbase, the main exchange for institutional investors and retailers based in the US, and its price on offshore platforms such as Binance, remained in a negative position throughout Bitcoin’s correction from $95,000 to $60,000 wide.
Related Reading
Whenever the Coinbase Premium Gap is negative, it usually means that traders in the United States are selling Bitcoin at a faster rate than buyers are entering. The positive gap shows the reverse volatility and demand from US investors pushing Coinbase prices higher compared to the global market value.
Notably, the metric entered a persistently negative territory on January 1 and remained there until March 7, a period when the demand for spots in the US was not high among crypto investors.
At its worst, the gap reached -175 on February 2, which coincided with the worst phase of the Bitcoin price crash. At the time of writing, Coinbase Premium Gap has now turned positive, registering a reading of +25.4 according to data shared by CryptoQuant analyst @IT_TECH_PL. The reversal of the Coinbase Premium Gap from the low of -175 to a positive reading is the first step a noticeable change in market structure.
Chart Image From X. Source: @IT_TECH_PL
The present study, while early and modest in relation to the depth of the previous negative empire, is the first consistent sign that the American local demand may return to Bitcoin. It shows that those same participants may gradually collect Bitcoin and compared to the rest of the world. However, the broader structure of Bitcoin’s price action still leaves room for more downside before the formation of vertical bottoms.
Bitcoin May Still Fall to $50,000 Before Bottoming
Although few signals are on-chain little by little they build, A few analysts are cautious before announcing a broad correction over. Technical analysis from crypto analyst Ted Pillows points to a long-term technical indicator that has been consistent with Bitcoin bottoms.
In his view, the last two declines in bear markets occurred below the 300 week explanatory moving average (300W EMA). In both cases, Bitcoin fell more than 15% below the index before the last bottom was established.
Bitcoin price chart. Source: @TedPillows On X
Related Reading
Bitcoin’s 300-week EMA is currently around $57,100. Using the same pattern can mean a it is possible to move to about $50,000, which would represent a drop of about 15% below the index. However, this prediction does not guarantee that Bitcoin will visit that level again before doing the floor.
Featured image from Pexels, chart from TradingView
