Data shows that the Bitcoin Coinbase Premium Index has turned positive again, a sign that demand for BTC is returning among US investors.

Bitcoin Recovers as Coinbase Premium Index Turns Green

As one analyst noted in a CryptoQuant Quicktake post, the Bitcoin Coinbase Premium Index recently turned positive again after being negative during the crash.

The “Coinbase Premium Index” here refers to an indicator that tracks the percentage difference between Bitcoin prices listed on the crypto exchanges Coinbase (USD pair) and Binance (USDT pair).

When the value of this metric is positive, it means that the price of the asset listed on Coinbase is currently higher than on Binance. Such a trend implies that BTC is seeing higher buying pressure or lower selling pressure on the former compared to the latter.

On the other hand, if the indicator is below zero, it is possible that users on the Coinbase platform are selling more than users on Binance.

Below is a chart showing the trend in the Bitcoin Coinbase Premium Index over the past few months:

The value of the metric appears to have turned green in recent days | Source: CryptoQuant

As shown in the chart above, the Bitcoin Coinbase Premium Index had turned negative towards the end of July, when BTC’s pullback first began. The indicator had then continued its decline to reach notable red values, leading to the cryptocurrency’s recent crash.

The timing of this trend could suggest that Coinbase users played a role in the bearish price action. The chart shows that after the asset had fallen to its lows, the indicator had instead turned positive, meaning that a buying wave had appeared on the platform.

Since then, the Coinbase Premium Index has remained in the green region and the coin’s price has recovered somewhat. Once again, it seems that Coinbase users have played a role in the asset’s price.

This pattern isn’t actually new, as the cryptocurrency has been in a relationship with the Coinbase Premium Index for most of this year.

Coinbase is known to be the platform of choice for US institutional entities, while Binance hosts global traffic. Thus, the indicator can be seen as a reflection of how the behavior of US-based whales differs from the rest.

So when the value changes polarity, it can be assumed that these big investors are changing their strategy. The metric is currently green, but it is questionable whether it will be in the coming days. If so, Bitcoin could continue its recovery, if the recent pattern is anything to go by.

BTC price

Bitcoin suffered a setback yesterday, dropping below $55,000. However, the coin has already recovered and is now back above $57,400.

Looks like the price of the coin has been steadily going up over the past few days | Source: BTCUSD on TradingView

Main image from Dall-E, CryptoQuant.com, chart from TradingView.com