PakGazette – A notable divergence has recently formed between the Coinbase Premium Index (NASDAQ 🙂 and the price of , as observed by CryptoQuant. This divergence is leaning towards the negative side despite the momentous Bitcoin price rally.
Bitcoin Price Rise and Coinbase Premium Index Fall
Over the years, short-term price trends have been predicted using momentum analysis with moving averages (MA). However, as the market evolves, other measures are used.
Over the past two weeks, a notable divergence has formed between the Coinbase Premium index and the price of Bitcoin. This divergence comes as the price of BTC rose from $94,000 to $108,000. The flagship cryptocurrency is now changing hands for $104,097.77, down 2.4% at the time of writing.
For context, the Coinbase Premium Index reflects demand for Bitcoin in the United States. It is calculated by tracking activity on major US cryptocurrency exchanges Coinbase and Binance. A higher premium suggests greater buying demand from US investors.
The fall of Coinbase Premium raises a major concern. This coincides with a season in which demand from North American investors has continued to increase. The January 2024 launch of Bitcoin exchange-traded funds (ETFs) and the recent macroeconomic climate have changed sentiment.
According to blockchain analytics platform CryptoQuant, “if US demand has not supported this price increase, it could indicate underlying weakness in the medium-term bullish momentum.”
Given these prospects, investors are advised to be cautious and monitor these developments closely.
Bitcoin price could rise, or not
A week ago, the situation was quite different, as PakGazette reported that as the price of Bitcoin plummeted, Coinbase Premium jumped.
Despite the price reversal amidst ATH rallies, the market is hopeful for a major rally in the near term. From the medium-term point of view, the focus is now on the close of the weekly candle at the level of $105,149.
If a false breakout occurs, Bitcoin price risks falling to a new low of $100,000.
