Bitcoin has broken above $22,000 again as on-chain data shows signs that whales have been buying BTC on Coinbase recently.
Bitcoin Coinbase Premium Gap Has Been Highly Positive Recently
As pointed out by an analyst in a CryptoQuant post, the Coinbase Premium Gap has been rising in recent days. The “Coinbase Premium Gap” here is an indicator that measures the difference in the Bitcoin price listed on the cryptocurrency exchange Coinbase and that listed on Binance.
Coinbase is popularly known to be more heavily used by US-based investors (especially institutional holders), while Binance receives a more global traffic. This means that the premium gap can provide insight into which of the two userbases are providing more buying pressure (or selling pressure) to the asset right now.
When the value of the indicator is negative, it means the price listed on Coinbase is currently lesser than that on Binance. This would suggest that Coinbase users have been doing more selling (or simply, lesser buying) than the global users recently.
On the other hand, a positive premium gap implies the American investors are buying the asset more heavily than the world userbase at the moment as the price on Coinbase is higher.
Now, here is a chart that shows the trend in the Bitcoin Coinbase Premium Gap over the past couple of weeks:
As displayed in the above graph, the Bitcoin Coinbase Premium Gap had been around neutral values for most of the last two weeks, but after BTC plunged to around $19,500, the metric’s value started to see some rapid rise.
This increase would suggest that as BTC hit those low prices, whales on Coinbase began to buy large amounts of the cryptocurrency, pushing the price higher on the exchange.
These high values have continued since then, implying that the buying pressure on the platform hasn’t dropped off relative to the activity taking place on Binance.
After the Coinbase Premium Gap hit these high values, the price also stopped declining further. And in the last 24 hours, Bitcoin has even observed some rapid uptrend, which may confirm that whales are indeed buying heavily on Coinbase and the premium gap isn’t simply because of a lesser amount of selling taking place from US-based investors as compared to global holders.
BTC could continue to see further bullish momentum if the premium gap remains at high values and whales keep up the buying. The quant also notes in the post that if the whales intend to keep the rally going, then it’s also unlikely that the asset would fall below the $19,500 level anytime soon, since that’s where the indicator’s value first started to observe the rise.
At the time of writing, Bitcoin is trading around $22,000, down 2% in the last week.