Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.
Coinbase Premium can be used to determine the sentiment among institutional and retail traders from the U.S. as it reflects the discount or premium on the Coinbase Pro trading platform mostly used by large crypto investors.
During the crypto crash, the metric showed one of the strongest dips in its history, suggesting that market makers on Coinbase were struggling to find enough liquidity on the market, which caused a large discount.
Coinbase $BTC price premium seems to be recovering.https://t.co/Xkoohe4Ozc https://t.co/ZEorApSlTT pic.twitter.com/SDEIn1IkPz
Since Coinbase Pro is mostly used by large investors, their average order size is significantly greater than the average order you see in a centralized exchange. To avoid unlikely volatility on the market, market makers inject more liquidity on the market prior to completing an order.
The metric’s recovery is a direct sign of returning buying power on the market and whales’ accumulation. With the rise of the buy volume on the market, traders and investors are pushing the premium higher.
We are already seeing the effect of returning buying volume on the market as Bitcoin has finally broken through the consolidation channel that has been forming since June 19. Unfortunately, BTC retraced after reaching the $22,000 price range.
One of the main sources of selling pressure on the first cryptocurrency could be gone from the market as the largest cryptocurrency miners announced that they have successfully realized most of the funds they used for stabilizing their operations.
Another source of pressure is the U.S. Dollar’s rally that suppresses almost every financial asset on both cryptocurrency and traditional markets.
At press time, Bitcoin is moving in the $21,000-$22,000 trading range and changing hands at $21,788.
Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.
Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.
Disclaimer: Any financial and market information given on U.Today is written for informational purpose only. Conduct your own research by contacting financial experts before making any investment decisions.
