The Bitcoin Coinbase Premium has fallen to a 7-month low: Will $95K be next?

Takeaways from the conference:

• Bitcoin has dropped to below $100,000. As its momentum decreases, it could return to its opening price of $93,500.

• Coinbase Premium reached a low of seven months due to the strong US selling pressure on spot Bitcoin.

• Long-term investors continue to take profits, while short-term traders accumulate BTC.

Bitcoin’s (BTCBTC fell again below $100,000 in Friday’s session. The crypto could potentially test its prior low of $98,200. This level was formed on the 23rd of June.

The Bitcoin was a hot topic on Thursday. Coinbase Premium IndexThe metric that measures the price difference between Bitcoin on Coinbase and global exchanges such as Binance has dropped to its lowest point since April 11. 

This implied that Bitcoin was trading at a lower price on Coinbase. It often reflected stronger sales pressure by US investors, and ETF related outflows. In the past, prolonged periods of negative premiums coincided with short term price weakness.

Daan Trades, a Crypto trader noted that these phases were not uncommon during larger downtrends. Analyst wrote that the discounts tend to appear when there is concentrated selling of Coinbase linked flows. Daan writes that while not necessarily a sign of bullishness, 

“The market rarely bottoms locally without first seeing such a discount.” 

A sustained price rise following the discount may indicate that the market has begun to absorb the selling pressure and could be the beginning of an accumulation.

Onchain data Further supporting this mixed configuration. Short-term Holder (STH), net position change, recently soared to an annual high. This suggests traders who hold coins on average for less than 150 days continue to add to their holdings despite recent pullback.

In contrast, long-term investors (LTH) have a net position that is close to yearly lows. This indicates seasoned investor profit taking. While new buyers may be stepping up, absorption levels are not strong enough yet to set a clear bottom.

Related: Why this key Bitcoin price trendline at $100K is back in focus

Bitcoin could test its yearly opening before recovering

The short-term Bitcoin charts (both the four- and one-hour-time frames) do not indicate a bullish setup. Price rises were driven primarily by covering shorts and not actual buying pressure. Over the last few hours however, BTC’s open interest steadily increased while funding rates were elevated. This could indicate that traders are opening up new long positions.

BTC may pull back further in the next week, possibly to $95,000, or even the annual open at $93,500. A move like this could clear out any long positions before setting the scene for a potential rebound driven by short liquidations.

Related: $100B in old Bitcoin moved, raising ‘OG’ versus ‘trader’ debate

This article contains no investment recommendations or advice. Risk is inherent in every investment decision and trade. The reader should always do research prior to making a final decision.