Bitcoin Coinbase Premium Index Has Turned Positive At 0.006, Why This Is Important

Scott Matherson

1 year ago

3 mins read

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The Bitcoin recent foray into $70,000 price territory has 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 have seen their holdings cross into profit zone. Particularly, the positive outlook seems to be positive among US-based investors, as shown by the Coinbase premium turning positive. Some see the return of the Coinbase premium as a bullish signal that could continue to drive the price higher.

Coinbase Premium Index Flips Positive

The Coinbase Premium Index (CPI), which had been trading in the 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 Bitcoin’s price on Coinbase versus other major exchanges.

When the premium turns positive, it means Bitcoin is trading at a higher price on Coinbase compared to Binance and, subsequently, other major crypto exchanges. This is important because it shows increased demand for Bitcoin on one of the largest US-based crypto 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 money is flowing into Bitcoin. At the time of writing, data from CryptoQuant shows that this premium recently reached 13.11. While this may seem small, it definitely indicates the beginning of buying pressure that could send Bitcoin on another leg higher

Interestingly, this flip into a positive Coinbase premium has come with a less bullish outlook on Bitcoin among Korean and Asian-based investors, at least in the short term. This information is revealed by CryptoQuant’s Korea Premium Index, which has been on a downtrend in the past two weeks.

Bitcoin Continues To Hold Strong

At the time of writing, Bitcoin is trading at $71,095 and is up by 4.31% amidst increased buying momentum, with the Bitcoin Open Interest recently reaching its all-time high. While a positive Coinbase Premium is a bullish indicator, the context around why it’s happening matters greatly in determining where Bitcoin’s price may go next.

A large part of the positive premium could be attributed to individual large holders called whales, with on-chain data showing instances of huge Bitcoin transfers from Coinbase to unknown private wallets.

As mentioned earlier, a sustained positive premium and interest from institutions and retail buyers is the most promising scenario for Bitcoin to build on. However, interest from Coinbase whales alone may not be enough to fuel a prolonged, substantial price rally. For Bitcoin to continue its upward trajectory, there must be a corresponding rise in the interest shown by retail investors.

Bitcoin price chart from Tradingview.com — BTC price rises to $71,500 | Source: BTCUSD on Tradingview.com

Featured image created with Dall.E, chart from Tradingview.com

Scott Matherson

Scott Matherson is a prominent crypto writer at NewsBTC with a knack for capturing the pulse of the market, covering pivotal shifts, technological advancements, and regulatory changes with precision. Having witnessed the evolving landscape of the crypto world firsthand, Scott is able to dissect complex crypto topics and present them in an accessible and engaging manner. Scott's dedication to clarity and accuracy has made him an indispensable asset, helping to demystify the complex world of cryptocurrency for countless readers.

Scott’s experience spans a number of industries outside of crypto including banking and investment. He has brought his vast experience from these industries into crypto, which allows him to understand even the most complex topics and break them down in a way that is easy for readers from all works of life to understand. Scott’s pieces have helped to break down cryptocurrency processes and how they work, as well as the underlying groundbreaking technology that makes them so important to everyday life.

With years of experience in the crypto market, Scott began to focus on his true passion: writing. During this time, Scott has been able to author countless influential pieces that have drawn in millions of readers and have shaped public opinion across various important topics. His repertoire spans hundreds of articles on various sectors in the crypto industry, including decentralized finance (DeFi), decentralized exchanges (DEXes), Staking, Liquid Staking, emerging technologies, and non-fungible tokens (NFTs), among others.

Scott’s influence is not just limited to the countless discussions that his publications have sparked but also as a consultant for major projects in the space. He has consulted on issues ranging from crypto regulations to new technology deployment. Scott’s expertise also spans community building and contributes to a number of causes to further the development of the crypto industry.

Scott is an advocate for sustainable practices within the crypto industry and has championed discussions around green blockchain solutions. His ability to keep in line with market trends has made his work a favorite among crypto investors.
In his personal life, Scott is an avid traveler and his exposure to the world and various way of life has helped him to understand how important technologies like the blockchain and cryptocurrencies are. This has been key in his understanding of its global impact, as well as his ability to connect socio-economic developments to technological trends around the globe like no one else.

Scott is known for his work in community education to help people understand crypto technology and how its existence impacts their lives. He is a well-respected figure in his community, known for his work in helping to enlighten and inspire the next generation as they channel their energies into pressing issues. His work is a testament to his dedication and commitment to education and innovation, as well as the promotion of ethical practices in the rapidly developing world of cryptocurrencies.

Scott stands steady in the frontlines of the crypto revolution and is committed to helping to shape a future that promotes the development of technology in an ethical manner that translates to the benefit of all in the society.

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