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

Bitcoin squeezes back above $80,000 — 110,000 traders liquidated as the hawkish Fed and CLARITY setback fail to hold it down; is $83,000 next?Bitcoin closed above $80,000 on Friday for the first time since September 7, and pushed to $81,299 over the weekend, triggering about $603 million of liquidations — $523 million of them shorts — across more than 110,000 traders. With the Fed's hike already priced and the SEC and CFTC advancing crypto rules after the CLARITY Act failed, here is what stands between BTC and the $83,000 gate.

Author Suzie

14 hours ago

Bitcoin closed above $80,000 on Friday for the first time since September 7, and pushed to $81,299 over the weekend, triggering about $603 million of liquidations — $523 million of them shorts — across more than 110,000 traders. With the Fed's hike already priced and the SEC and CFTC advancing crypto rules after the CLARITY Act failed, here is what stands between BTC and the $83,000 gate.

Gold ends three-week slide at the $4,400 line — eight straight days of ETF inflows vs a 5% 10-year and a 100 dollar Spot gold closed Friday at $4,378.39, up 0.84% on the day and about 0.8% for the week — its first weekly gain in four weeks — with the intraday high of $4,399.67 leaving it 33 cents shy of the $4,400 line. Gold ETFs have now logged eight straight sessions of inflows, but with the 10-year back above 5% and the dollar index near 100, here is what decides whether this is a reversal or a bounce.

Author Suzie

15 hours ago

Spot gold closed Friday at $4,378.39, up 0.84% on the day and about 0.8% for the week — its first weekly gain in four weeks — with the intraday high of $4,399.67 leaving it 33 cents shy of the $4,400 line. Gold ETFs have now logged eight straight sessions of inflows, but with the 10-year back above 5% and the dollar index near 100, here is what decides whether this is a reversal or a bounce.

Have Fed Rate Hike Headwinds Been Priced In? Gold Rebounds Strongly Toward $4,400, Poised for a New Rally As of the European session on September 18, gold prices (XAUUSD) extended Thursday's rebound, rising strongly in intraday trading to $4,399.75 today, just shy of the $4,400 psychological

Author TradingKey

Sep 18, Fri

As of the European session on September 18, gold prices (XAUUSD) extended Thursday's rebound, rising strongly in intraday trading to $4,399.75 today, just shy of the $4,400 psychological

US to delay new "overcapacity" tariffs on China — what the pause means for trade, inflation and the dollar Washington is expected to hold off announcing new tariffs over Chinese "overcapacity" until after the 24 September summit, according to Bloomberg. The postponed plan would have added 7.5% to Chinese goods, taking second-term US tariffs to around 20%. Here is what is on the table, and what a deal versus no deal would mean for the yuan, Hong Kong equities and the dollar.

Author Mitrade

Sep 18, Fri

Washington is expected to hold off announcing new tariffs over Chinese "overcapacity" until after the 24 September summit, according to Bloomberg. The postponed plan would have added 7.5% to Chinese goods, taking second-term US tariffs to around 20%. Here is what is on the table, and what a deal versus no deal would mean for the yuan, Hong Kong equities and the dollar.

Gold rebounds to near $4,350 on weaker US Dollar, falling oil prices Gold price (XAU/USD) rises to near $4,345 during the early Asian session on Friday. The precious metal rebounds from a six-week low amid falling oil prices and a weaker US Dollar (USD). Traders continue to assess the latest Federal Reserve (Fed) rate hike and policy cues.

Author FXStreet

Sep 18, Fri

Gold price (XAU/USD) rises to near $4,345 during the early Asian session on Friday. The precious metal rebounds from a six-week low amid falling oil prices and a weaker US Dollar (USD). Traders continue to assess the latest Federal Reserve (Fed) rate hike and policy cues.

Popular Symbols