The final Bitcoin revolution (BTC) above $ 50,000 may have to wait longer to materialize as buying pressure on Coinbase Pro shows signs of weakness – at least in the short term.
According to CryptoQuant, the Coinbase Premium Index, which measures the gap between the price of BTC on Coinbase Pro and Binance, has turned negative. In other words, the selling pressure on Coinbase seems to be on the rise when compared to other exchanges like Binance.
A negative Coinbase Premium reading could be a harbinger of short-term resistance. On the other hand, a high premium indicates strong buying pressure on Coinbase.
Based on this index, CryptoQuant CEO Ki Yong Joo thinks over $ 50,000 “looks very difficult” in the short term.
“Current purchasing power does not come from Coinbase,” he added. “No more Coinbase premiums versus Binance / Huobi / OKEx. Be careful”.
Coinbase has become the main watchmaker for Bitcoin demand due to its popularity with large institutional buyers. These market participants receive their bitcoins from Coinbase Pro OTC markets. While these large purchases do not immediately affect the price of bitcoin, they mean an increase in demand for the digital asset and therefore a decrease in supply. Hence, the Coinbase Premium Index is a way to gauge institutional demand for BTC in the short term.
Short-term fluctuations in Coinbase’s premium don’t seem to matter to Bitcoin’s long-term journey. The digital asset remains in a strong trend, reaching a significant distance north of $ 49,700 on Sunday, according to TradingView.
Bitcoin is up 28% over the past week, thanks in large part to the planned acquisition of Tesla’s asset. Based on a recent 10K file from the electric vehicle manufacturer to the US Securities and Exchange Commission, it plans to allocate roughly 7.7% of its total cash position to Bitcoin.
Listed companies and fund managers own about 6% of traded Bitcoin offerings – a figure that excludes Tesla’s $ 1.5 billion position.