cryptoglobe.com
Bitcoin could soon see a dramatic upward price swing according to the head of research at cryptocurrency brokerage FalconX, David Lawant, based on the current discount on the Coinbase Bitcoin premium and its historical significance.
In a post shared on the microblogging platform X (formerly known as Twitter), Lawant noted that the last time the Coinbase Bitcoin premium was as negative as it currently is was back in October 2023, when BTC was trading at around $27,000 and before the cryptocurrency entered a bull run to a new all-time high above $73,500.
In his post Lawant pointed to the indicator’s historical significance and pointed to a potential rise after BTC since corrected from over $73,000 to around $60,000 at the time of writing.
Always darkest before the dawn?
— David Lawant (@dlawant) July 1, 2024
According to my calculations, the last time the Coinbase premium was this negative was a couple of months before the massive rally from Oct '23 to March '24. pic.twitter.com/o7iSS4VGHP
According to CryptoQuant, the Coinbase premium index is an indicator showing the price gap between Coinbase’s BTC/USD trading pair and Binance’s BTC/USDT pair. When the premium is positive, it shows buying pressure on the exchange is heating up.
A deeply discounted premium suggests weak buying pressure from American investors, a trend that has coincided with past Bitcoin price bottoms.
Lawant anticipates a resurgence of U.S. investor interest, potentially propelling Bitcoin to new highs in the coming months, as in another post he said he believes the “next 6-12 months will be splendid – and probably volatile.”
Coinbase’s premium index has turned increasingly bearish at a time in which large BTC investors have been quietly accumulating the flagship cryptocurrency as its price recovers from a recent drawdown that saw it hit a low just above the $58,000 mark.
According to data shared by on-chain analytics firm IntoTheBlock, holders who control at least 0.1% of Bitcoin’s total supply have added 7,130 BTC worth around $436 million to their wallets in a single day amid the price drop.
This buying activity is reflected in the “Large Holders Netflow” metric, which tracks the net movement of Bitcoin into and out of wallets associated with these major investors. IntoTheBlock’s definition of large Bitcoin holders – those with at least 0.1% of the cryptocurrency supply – means holders with at least 19,700 BTC, or around $1.2 billion.
This recent buying spree represents the strongest net inflows from large holders since late May and could be interpreted as a sign that BTC whales view current prices as low and as an attractive opportunity to add to their Bitcoin holdings, potentially disregarding the wider market fear.
Featured image via Unsplash.