Bitcoins price recent movement may be showing its first signs of Relief as an indicator closely monitored tied to US Demand has changed directions. Coinbase Premium Gap is now in positive territory after nearly 10 weeks with persistently negative readings. This period coincided closely with Bitcoin’s fall from $95,000 down to $65,000 by February.
Coinbase Premium Turns Positive
Coinbase’s Premium Gap, which is the difference in price between Bitcoin traded on Coinbase (the primary US exchange used by institutional and retail US investors) and Bitcoin sold on other platforms, such as Binance or Bitfinex, has remained negative throughout the entire Bitcoin correction, from 95,000 dollars to mid-60,000.
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If the Coinbase premium gap is negative it means traders are moving faster to sell Bitcoin than there are buyers. A positive gap shows the reverse dynamic, with US investors pushing Coinbase’s prices higher than the market price.
It is noteworthy that the indicator entered a persistently negative zone from January 1, which lasted until March 7, a time when US spot market demand was virtually absent.
The gap was at its lowest on 2 February, coinciding the worst phase of Bitcoin’s price drop. As of the writing of this article, the Coinbase premium gap has turned positive. It now registers a reading +25.4 according to data shared by Analyst @IT_TECH_PL at CryptoQuant. It is important to note that the change in the Coinbase Premium gap from the low reading of -175 back up to positive numbers represents the first steps towards achieving a meaningful change in market structure.
Chart Image From X. Source: @IT_TECH_PL
While still modest in comparison to the previous negative regime, the current reading is the first sign of a consistent trend that American spot demand may be returning to Bitcoin. This shows that the same participants are slowly increasing their Bitcoin holdings compared with the rest of world. Bitcoin is still a volatile asset, and the price structure remains open to further declines before it reaches a final bottom.
Bitcoin could still drop to $50,000 before bottom.
There are a couple of on-chain indicators are slowly turning constructive, Some analysts hesitate to declare the larger correction complete. Ted Pillows’ technical analysis of crypto markets points to an indicator with a longer time frame that always occurs at the bottoms of Bitcoin.
According to his observations, both of the major bear market lows have occurred beneath the 300W exponential moving average. Both times, Bitcoin dropped more than 15 percent below the indicator.
Bitcoin Price Chart. Source: @TedPillows On X
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Bitcoin’s 300 week EMA currently sits at around $57,100. The same pattern could be applied to a possible move to around $50,000, This would be a drop of approximately 15%. However, it is important to note that this does not mean that Bitcoin will ever return to the previous level. before forming a bottom.
Chart from TradingView, Featured Image from Pexels
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Source: www.newsbtc.com
