Since the market-wide crash in early October, Bitcoin price has struggled to resume any significant move upward. The flagship cryptocurrency has fallen even deeper into bearish territory, breaching multiple support zones.
With the situation in the crypto market painting a bleak picture, the prevailing sentiment around the leader can hardly be considered bullish. Interestingly, a recent review of the chain puts the key players behind Bitcoin’s weakness into perspective.
BTC Coinbase Premium Gap reads – $57
In a recent post on social media platform X, on-chain analyst Maartunn says shared that a substantial portion of the selling pressure in the Bitcoin market could come from the activities of US investors. This on-chain observation is based on the Coinbase Premium Gap metric, which measures whether US-based investors are buying or selling Bitcoin more aggressively than the rest of the global market.
Related reading
For context, the metric tracks the price difference between Bitcoin on Coinbase and Bitcoin on major offshore exchanges (e.g. Binance). A positive reading usually indicates that Bitcoin is more expensive on Coinbase, meaning US traders are buying aggressively. On the other hand, negative numbers are interpreted as higher sales or reduced interest among investors in the United States.
According to the analyst, the Coinbase Premium Gap recently dropped to a value of -$57. As previously suggested, this deep negative reading shows that US traders are actively offloading Bitcoin, rather than accumulating.
Interestingly, this increased selling activity is accompanied by Bitcoin’s price momentum towards lower levels. So it becomes clear that the selling pressure reflected in Bitcoin’s price is mainly due to the absence of US demand.
BTC Market Outlook
According to historical data, Bitcoin’s long-term direction could go either way. While a negative Coinbase Premium Gap value is typically indicative of a short-term bearish phase, the long-term perspective is a little less straightforward.
In previous cycles, extended periods of negative data have preceded the formation of market bottoms, after which prices rebounded upwards. This often happens when sell-side pressure subsides and new demand enters the Bitcoin market.
Related reading
If this negative reading deepens and there is no new demand in the market, Bitcoin price could follow suit and move further south. However, a reversal of the Coinbase Premium Gap to the upside – pushing it to neutral or positive levels – could be crucial for the world’s leading cryptocurrency.
At the time of writing, Bitcoin has a valuation of $88,260, which does not reflect any significant price movements over the past day.
Featured image of Dall-E, chart from TradingView