Bitcoin’s recent foray into the $70,000 price territory has once again become a hot topic among investors, with many looking at a positive price outlook. As a result of this fascinating price action, the vast majority of long-term holders they saw their holdings cross into the profit zone. In particular, the positive outlook appears to be positive among US-based investors, as evidenced by the fact that the Coinbase premium has turned positive. Some see the return of the Coinbase premium as a bullish signal that could continue to push the price higher.
The Coinbase Premium index turns positive
The Coinbase Premium Index (CPI), which had been trading negative since May 18, has now turned positive, according to a cryptocurrency analyst who cited data from CryptoQuant. The Coinbase Premium refers to the difference in the price of Bitcoin on Coinbase compared to other major exchanges.
When the premium turns positive, it means that Bitcoin is trading at a higher price on Coinbase than on Binance and subsequently other major cryptocurrency exchanges. This is important because it shows increased demand for Bitcoin on one of the largest US-based cryptocurrency exchanges. On the other hand, a negative premium indicates a lack of substantial buying pressure from US-based traders.
Since Coinbase is a popular entry point for new US crypto investors, a premium price indicates that money is flowing into Bitcoin. At the time of writing, CryptoQuant data shows that this premium recently reached 11.13. While this may seem small, it definitely indicates the start of buying pressure that could send Bitcoin another leg higher
Interestingly, this turn to a positive Coinbase premium has come with a less bullish outlook on Bitcoin among Korean and Asian investors, at least in the short term. This information is revealed by CryptoQuant Korean Awards Indexwhich has been trending downwards for the past two weeks.
Bitcoin continues to hold up
At the time of writing, Bitcoin is trading at $71,095 and is up 4.31% amid growing buying momentum, with the Open interest on Bitcoin it recently reached its all-time high. While a positive Coinbase Premium is a bullish indicator, the context in which it occurs is very important in determining where the price of Bitcoin could go.
Much of the positive premium could be attributed to individual large holders called whales, as on-chain data shows instances of huge Bitcoin transfers from Coinbase to unknown private wallets.
As mentioned above, a positive premium and sustained interest from institutions and retail buyers represents the most promising scenario for Bitcoin to build on. However, Coinbase’s whale interest alone may not be enough to fuel a sustained and substantial price rally. In order for Bitcoin to continue its upward trajectory, there must be a corresponding increase in price interest shown by retail investors.
Featured image created with Dall.E, chart from Tradingview.com
