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Cryptocurrencies took a major hit in the crash that began last October. While Bitcoin and altcoins experienced a decline, the risk is not over for Ethereum ($ETH).
A CryptoQuant analyst warned investors, noting that the $ETH premium on Coinbase has fallen to its lowest level in 10 months.
According to CryptoQuant analyst CryptoOnchain, Ethereum ($ETH) is showing bearish signals.
At this point, the analyst noted that the Coinbase premium for $ETH had fallen to its lowest level in 10 months, indicating weakening demand from US-based investors and stronger selling pressure on Coinbase compared to Binance.
Coinbase also noted that the drop in $ETH premium to its lowest level in 10 months poses a significant obstacle to $ETH price regaining the $3,300 level.
“The sharp drop in the Ethereum Coinbase Premium Difference into negative territory indicates weakening demand from US institutional investors, posing a significant obstacle to the price regaining the $3,300 level.”
The analyst noted that $ETH has been in a downtrend since $4,700 and has failed to break through the key resistance level of $3,300, adding that low demand for spot $ETH ETFs also triggered the decline.
The analyst noted that historically sustainable Ethereum rallies have been accompanied by a positive Coinbase Premium, where prices on Coinbase trade higher than those on Binance.
The current negative read indicates that US-based institutional investors are not actively accumulating $ETH at current price levels. Consequently, the analyst stated that a breakout above $3,300 is unlikely until the price difference between Coinbase and Binance turns positive and real demand re-emerges in the US spot market.
The analyst warned investors that if this negative trend in Coinbase $ETH premium continues, there is a risk of further downward correction.
*This is not investment advice.