Data shows that the Bitcoin Coinbase Premium Gap spiked as its value rose to $74,000, a possible sign that the platform’s institutional users were supporting the run.
Bitcoin’s Coinbase Premium Gap rose to $61 during the rally
In a new wire on X, CryptoQuant community analyst Maarunn talked about the latest BTC rally and what could be behind it. “Several data points show that aggressive institutional demand is driving the outbreak,” Maartunn said. One such metric is the Coinbase Premium Gap.
This indicator measures the difference between the Bitcoin price listed on Coinbase (USD pair) and that on Binance (USDT pair). The value of the metric essentially tells us about the difference in buying/selling behavior on the two cryptocurrency exchanges.
Coinbase hosts a US-centric traffic, with institutional entities among its main customers, while Binance is used by traders from all over the world. So if the Coinbase Premium Gap is positive, it could be a sign that US-based institutions are exerting higher buying pressure (or lower selling pressure) than global users.
Previously, the indicator had a notable red value, indicating that the asset was trading at a discount on Coinbase, but recently it has seen a shift to positive.
From the chart above, it is visible that the Bitcoin Coinbase Premium Gap saw a sharp increase alongside the last BTC price rally, implying that the accumulation on Coinbase has driven the asset to a higher value than the global market. At the peak of this rise in the positive territory, the indicator reached a value of $61. “That means BTC was trading $61 higher on Coinbase than on other exchanges, a strong signal that US institutional buying pressure is entering the market,” the analyst explained.
Another factor pointing to institutional involvement in the rally is Hyblock data. As visible in the chart below, Hyblock shows an increase in the cohort’s Time-Weighted Average Price (TWAP) orders from $10,000 to $1 million.
A TWAP order is a trading algorithm that divides a large order into smaller pieces and executes them at regular time intervals. “TWAP orders are typically used by large players who are piling in without moving the market too aggressively,” Maartunn said. The $10,000 to $1 million cohort bought $750 million worth of Bitcoin through such orders in addition to the rally.
While institutions have shown demand, the analyst has warned of a risk lurking beneath the surface: the increasing levels of leverage in derivatives markets.
As shown in the chart, Open Interest, an indicator that tracks the total number of derivatives positions, has risen rapidly for both Bitcoin and the altcoins. “If supportive bids slow down, over-leveraged positioning could quickly disappear, increasing volatility,” Maartunn said.
BTC price
At the time of writing, Bitcoin is hovering around $72,600, up nearly 6% in the past seven days.