Bitcoin Rally Likely Driven by Coinbase Users, Suggests Premium Gap

5:03 pm
September 19, 2023
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According to a recent analysis, the positive Bitcoin Coinbase Premium Gap indicates that the recent surge above $27,000 may be attributed to buying activity on the Coinbase platform.

Coinbase Users Show Increased Bitcoin Buying

An analysis by the CryptoQuant Netherlands community manager, Maartunn, reveals a notable increase in buying activity on Coinbase. The analysis focuses on the “Coinbase Premium Gap,” which measures the difference between Bitcoin prices on Coinbase and Binance.

As Coinbase is more popular among US-based investors, a positive value for the Premium Gap suggests that American investors may be exerting higher buying pressure or lower selling pressure compared to global users.

The chart displaying the trend of the Bitcoin Coinbase Premium Gap over the past few days shows an upward trajectory.

The value of the metric has been rising in recent days | Source: @JA_Maartun on X

The graph indicates that the Premium Gap was negative earlier in the month, suggesting more selling from Coinbase users. It became particularly pronounced during the drop to the $25,000 level, indicating a selloff driven by US holders. After a delay, the Premium Gap turned positive during the recovery, implying that US-based investors joined the surge.

Since then, the Premium Gap has consistently remained at significant positive values, indicating continuous accumulation of Bitcoin by Coinbase users.

The recent spike in the Premium Gap suggests intensified buying on Coinbase in the past couple of days. This may indicate that US-based investors are contributing to the asset’s growth beyond $27,000, which is seen as a positive sign as their strong buying pressure could push the cryptocurrency to test higher levels.

It remains to be seen whether the Bitcoin Coinbase Premium Gap will continue to remain positive in the coming days or if buying activity will cool down on the platform.

BTC Price

Bitcoin experienced a sharp drop from $27,200 to $26,600, but it quickly recovered to the $27,000 mark, as shown in the chart below.

BTC has experienced volatility in the past few days | Source: BTCUSD on TradingView

Image Source: Michael Förtsch on Unsplash.com

Charts Source: TradingView.com, CryptoQuant.com

FAQs

What is the Coinbase Premium Gap?

The Coinbase Premium Gap measures the difference between Bitcoin prices listed on the Coinbase and Binance cryptocurrency exchanges. A positive value indicates that the price on Coinbase is higher than on Binance, potentially reflecting different behaviors and buying/selling pressures between US-based investors and global users.

How does the Premium Gap provide insights into user behavior?

The Premium Gap provides insights into user behavior by measuring the relative buying and selling pressures of Coinbase and Binance users. When the Premium Gap is positive, it suggests that Coinbase users, primarily US-based investors, may be exerting higher buying pressure or lower selling pressure compared to global users.

What does it mean if the Premium Gap is consistently positive?

A consistently positive Premium Gap suggests that Coinbase users have been consistently accumulating Bitcoin on the platform. This indicates sustained buying activity and investor confidence in the cryptocurrency.


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