Bitcoin (BTC) price woes have led to a drop in trading activity on leading cryptocurrency exchange Coinbase.
This is measured by the coin’s Coinbase Premium Index (CPI), which has dropped into negative territory.
US investors are cutting their risks
On-chain data shows that the Bitcoin Coinbase Premium Index is -0.003 at press time. This metric measures the difference between BTC prices on Coinbase and Binance.
When its value rises, it indicates significant buying activity from US investors on Coinbase. Conversely, when it falls and goes into negative territory, it signals less trading activity on the US exchange.
Confirming this, the coin’s Coinbase Premium Gap (CPG) is showing similar trends. At the time of writing, BTC’s CPG is -2.1%. When BTC’s CPG is negative, it indicates a decrease in buying pressure from US investors on the exchange.
In a recent interview with BeinCrypto, Julio Moreno, head of research at CryptoQuant, confirmed the low BTC trading activity among US investors. According to Moreno
“US investor demand for Bitcoin has entered negative territory, according to our Inter-exchange Flow Pulse (IFP) indicator. The increase in US investor demand is associated with higher Bitcoin prices.”
This metric measures the movement of BTC between spot and derivatives exchanges to gauge investor sentiment and potential future price trends.
When it rises, it is a bullish signal. It suggests that more coins are flowing from spot exchanges to derivatives exchanges. This means that BTC holders are becoming more risk-tolerant and potentially positioning themselves for higher prices with leverage.
On the other hand, when a coin’s IFP falls, it is a bearish signal that shows a flow of coins from derivatives exchanges back to spot exchanges. This means that investors are selling their assets or exiting leveraged positions.
Read more: Who will own the most Bitcoin in 2024?
At the time of writing, IFP BTC is down to 649,500 and its price is currently below its 90-day moving average. A similar trend was observed between December 14, 2023 and February 24, 2024, after which the coin’s price corrected from $46,000 to a low of $39,000.
BTC Price Prediction: Will the Next Price Level Be Below $58,000?
At press time, BTC is trading at $58,633. Still lagging behind significant bearish sentiment, the leading coin is at risk of falling below the $58,000 price level again.
According to the coin’s parabolic stop and reverse (SAR) readings, the indicator’s dots are above the BTC price and have been in this position since July 4th.
This indicator measures asset price trends and potential reversal points. When its dots lie above the asset price, the market is said to be in a downtrend. This indicates that the asset price is falling and may continue to fall.
If the decline continues, the BTC price could fall to $57,983.
However, if buyer activity increases, the price of the coin may rise to $59,737.
