Is Institutional Selling Responsible for Bitcoin’s (BTC) Drop to $57,000? Latest Data Insights

  • Data shows the Bitcoin Coinbase Premium has been negative for a while now, a sign that institutional selling has been occurring behind the scenes.
  • The “Coinbase Premium Gap” is an indicator that keeps track of the difference between the BTC prices listed on the cryptocurrency exchanges Coinbase (USD pair) and Binance (USDT pair).
  • Recent sharp negative values of the indicator have coincided with the recent crash that the cryptocurrency has observed, suggesting that selling on the platform may be behind the crash.

Recent data reveals a negative Bitcoin Coinbase Premium, indicating a surge in institutional selling. This trend could be a significant factor behind the recent cryptocurrency crash.

Bitcoin Coinbase Premium Gap Has Turned Quite Negative Recently

As pointed out by CryptoQuant Netherlands community manager Maartunn in a post, the Bitcoin Coinbase Premium Gap has been negative for seven straight days. This indicator tracks the difference between the BTC prices listed on the cryptocurrency exchanges Coinbase (USD pair) and Binance (USDT pair). A positive value indicates higher buying pressure on Coinbase, while a negative value suggests higher selling pressure.

Implications of the Negative Coinbase Premium Gap

The recent sharp negative values of the indicator coincide with the recent crash in Bitcoin’s value. This trend suggests that increased selling on Coinbase may be a significant factor behind the crash. Coinbase is popular among American institutional entities, while Binance has a more global userbase. Therefore, the indicator’s value reflects how the behavior of the US-based institutional traders differs from that of the global investors. The recent negative streak of the indicator implies that these investors have been participating in a selloff recently, which could continue to drive bearish price action for Bitcoin.

BTC Price

At the time of writing, Bitcoin is floating around $58,600, down over 7% in the last seven days. The price of the asset has observed a significant plunge recently, which aligns with the negative trend in the Bitcoin Coinbase Premium Gap.

Conclusion

The recent negative streak of the Bitcoin Coinbase Premium Gap indicates a surge in institutional selling, which could be a significant factor behind the recent cryptocurrency crash. As long as this trend continues, Bitcoin could continue to observe bearish price action. However, a flip towards the positive could suggest at least sideways movement around the current levels, if not outright a switch towards bullish momentum.

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