Bitcoin Definitive Breakout Over $50k Will Take Time.
2021-02-15 | Eddy Morgan
![Bitcoin Definitive Breakout Over $50k Will Take Time.]()
Bitcoin [
BTC] definitive breakout over $50k might
need to wait longer to materialize as spot purchasing pressure on Coinbase Pro shows signs of weakening - at least
of,
within the short term.
The Coinbase Premium Index, which measures the gap between the BTC price on Coinbase Pro and Binance, has flipped negative,
consistent with CryptoQuant. In other words, selling pressure on Coinbase appears to be strengthening compared with other exchanges like Binance.
A negative reading on the Coinbase Premium Index
might be a precursor to short-term resistance. While on
the opposite hand, when the premium is high, it indicates strong spot purchasing pressure on Coinbase.
Based on the index, CryptoQuant CEO Ki-Young Ju
believes topping $50k “looks pretty tough” within the near term.
“Present purchasing power doesn’t come from Coinbase,” he
added. “No more Coinbase premium compared to Binance/Huobi/OKEx..”
Coinbase has become
a renowned bellwether for Bitcoin demand due to its popularity among large, institutional buyers. These market participants acquire their BTC via OTC [Over-the-Counter] markets on Coinbase Pro. Although these large purchases don’t immediately impact the price of Bitcoin [BTC], they signify growing demand for the crypto asset and, in turn, diminishing supply. The Coinbase Premium Index, therefore, is
a method to measure institutional demand for BTC
within the short term.
A short-term fluctuation
within the Coinbase premium doesn’t appear
to possess any pertaining to Bitcoin’s long-term trajectory. The digital asset remains within a strong uptrend, having peaked well north of $49.7k earlier on Sunday,
consistent with TradingView data.
The Bitcoin price has gained a whopping 28% over the past week, thanks in large part to Tesla’s planned acquisition of the asset.
Supported the electrical vehicle maker’s
most up-to-date 10K filing with the
U.S. SEC [Securities and Exchange Commission], it plans to allocate roughly 7.7% of its gross cash position to BTC.
Publicly-traded businesses and fund managers
hold roughly 6% of Bitcoin’s present circulating supply - a figure that doesn’t embody Tesla’s $1.5 Bln position.
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