Mitrade Insights is dedicated to providing investors with rich, timely and most valuable financial information to help investors grasp the market situation and find timely trading opportunities.

2021

Best News & Analysis Provider

FxDailyInfo

2022

Best Forex Educational Resources Global

International Business Magazine

Insights

News

Cryptocurrencies

Is A Major Bitcoin Dip Coming? What the Coinbase Index Tells Us

Source Newsbtc

An analyst from the CryptoQuant QuickTake platform has now drawn attention to a particular trend tied to the Coinbase Premium Index (CPI) which currently suggests a grim move brewing for Bitcoin.

This indicator, when placed with its Simple Moving Average over 14 days (SMA14), has often shown a significant correlation with Bitcoin’s selling pressure, shedding light on how crucial its impact is on the market.

Bull or Bear: What the Coinbase Index Tells Us

Before diving into what the Coinbase Premium Index is currently signalling for Bitcoin, it is worth explaining further the essence of this indicator to grasp the credibility of it. Notably, the Coinbase Premium Index (CPI) is an analytical tool that measures the variance between Bitcoin’s price on Coinbase Pro and its price on other major exchanges.

A negative CPI value suggests that Bitcoin is trading at a lower price on Coinbase Pro compared to other platforms, which typically indicates a selling pressure in the US market.

Related Reading: Bitcoin Eyes $63,000: Key Indicators Signal Further Decline – Time To Sell?

According to the CryptoQuant analyst with the name ‘burakkesmeci,’ this phenomenon has been observed more frequently after the US approved the trading of spot exchange-traded funds (ETFs), which currently seems to have amplified the significance of CPI as a leading indicator.

When Coinbase Premium Index is below SMA14, selling pressure increases

“Examining the data for 2024, we clearly see that Bitcoin price corrections have occurred when the CPI (Coinbase Premium Index) fell below its’ SMA14.” – By @burak_kesmeci

Link https://t.co/Bc3N1cfh5W pic.twitter.com/tN99LNhNkr

— CryptoQuant.com (@cryptoquant_com) July 30, 2024

The analyst disclosed that for 2024, the data reveals a clear pattern: Bitcoin often faces price corrections when the CPI dips below its SMA14. This specific behaviour points to a bearish sentiment when the index falls short of the moving average, signaling increased selling activity.

Currently, the CPI stands at -0.008, contrasting with the SMA14 at 0.020. This discrepancy according to burakkesmeci “indicates that sellers have a stronger hand in the US market.”

Bitcoin Market Performance

Looking at Bitcoin’s market performance so far, the phenomenon of a seller-driven market, as indicated by the CPI, appears to hold true. Currently, Bitcoin trades at a price of $65,805, marking a 3% dip in the past 24 hours and roughly 2% in the past week.

Bitcoin (BTC) price chart on TradingView

In the past day alone, the asset’s market cap has declined by over $40 billion, a stark contrast to its 24-hour trading volume, which has seen quite the opposite, surging from below $30 billion as of yesterday to as high as $36.7 billion, at the time of writing.

Regardless of the price performance, a handful of crypto analysts remain optimistic. For instance, Crypto Rover, a renowned enthusiast in the crypto space, disclosed that Bitcoin is currently just consolidating inside a notable bull flag pattern.

According to Rover, “This is the worst time to be bearish. The breakout will be massive.”

#Bitcoin is basically consolidating in one of the largest bull flags I’ve ever seen.

This is the worst time to be bearish.

The breakout will be massive. pic.twitter.com/oauSgiBNRY

— Crypto Rover (@rovercrc) July 30, 2024

Featured image created with DALL-E, Chart from TradingView

Disclaimer: For information purposes only. Past performance is not indicative of future results.

Recommended Articles

【Daily Brief】10-year Treasury yield briefly tops 5%, S&P 500 slips to 7,602 and the dollar firms at 99.3 as the Fed's decision eve begins The 10-year Treasury yield touched 5.014% on Monday — its first print above 5% since October 2023 — while the S&P 500 closed 0.48% lower at 7,619.98 and the dollar index firmed to 99.3. Here is the full market wrap ahead of Wednesday's FOMC decision, the dot plot and the August retail sales report, plus today's CLARITY Act Senate vote.

Author Irene Q.

Sep 15, Tue

The 10-year Treasury yield touched 5.014% on Monday — its first print above 5% since October 2023 — while the S&P 500 closed 0.48% lower at 7,619.98 and the dollar index firmed to 99.3. Here is the full market wrap ahead of Wednesday's FOMC decision, the dot plot and the August retail sales report, plus today's CLARITY Act Senate vote.

October hike odds climb toward 60% as Goldman and BofA both flip — what Warsh's "dose of accommodation" really changed Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.

Author Irene Q.

Sep 23, Wed

Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.

Memory chips surge, Nasdaq notches a second straight record close — why the Dow fell 185 points anyway Micron gained 5%, SanDisk 6.8%, Seagate 4% and Western Digital 3% as the memory complex led the Nasdaq Composite to a second consecutive record close of 27,244.28. But the Dow fell 185 points as JPMorgan, Wells Fargo and Schwab slid more than 3% each — a split tape that says more about positioning than about the economy.

Author Irene Q.

Sep 23, Wed

Micron gained 5%, SanDisk 6.8%, Seagate 4% and Western Digital 3% as the memory complex led the Nasdaq Composite to a second consecutive record close of 27,244.28. But the Dow fell 185 points as JPMorgan, Wells Fargo and Schwab slid more than 3% each — a split tape that says more about positioning than about the economy.

US input costs rose at the fastest pace in four years — the September flash PMI beat is an inflation story, not a growth story US September flash PMIs came in far above expectations, with the composite at 58.4, a five-year high. But the detail that moved markets was input cost inflation at its fastest since October 2022, driven by fuel, transport and supply shortages. Brent is back above $100 and the 10-year Treasury yield has hit its highest since 2007.

Author Suzie

Sep 24, Thu

US September flash PMIs came in far above expectations, with the composite at 58.4, a five-year high. But the detail that moved markets was input cost inflation at its fastest since October 2022, driven by fuel, transport and supply shortages. Brent is back above $100 and the 10-year Treasury yield has hit its highest since 2007.

WTI (USOIL) Is down 2.03% on Sep 25: Here Is Why WTI (USOIL) is down 2.03% at Sep 24 22:20(UTC+0), now at $92.517, with a 7-day down of 3.63%.What is driving WTI (USOIL)’s stock price down today?The drop in WTI crude oil prices was primarily driven by

Author TradingKey

Sep 25, Fri

WTI (USOIL) is down 2.03% at Sep 24 22:20(UTC+0), now at $92.517, with a 7-day down of 3.63%.What is driving WTI (USOIL)’s stock price down today?The drop in WTI crude oil prices was primarily driven by

Popular Symbols