Is A Major Bitcoin Dip Coming? What the Coinbase Index Tells Us

An analyst from the CryptoQuant QuickTake platform has now drawn attention to a particular trend tied to the Coinbase Premium Index (CPI) which currently suggests a grim move brewing for Bitcoin. This indicator, when placed with its Simple Moving Average over 14 days (SMA14), has often shown a significant correlation with Bitcoin’s selling pressure, shedding light on how crucial its impact is on the market. Bull or Bear: What the Coinbase Index Tells Us Before diving into what the Coinbase Premium Index is currently signalling for Bitcoin, it is worth explaining further the essence of this indicator to grasp the credibility of it. Notably, the Coinbase Premium Index (CPI) is an analytical tool that measures the variance between Bitcoin’s price on Coinbase Pro and its price on other major exchanges. A negative CPI value suggests that Bitcoin is trading at a lower price on Coinbase Pro compared to other platforms, which typically indicates a selling pressure in the US market. Related Reading: Bitcoin Eyes $63,000: Key Indicators Signal Further Decline – Time To Sell? According to the CryptoQuant analyst with the name ‘burakkesmeci,’ this phenomenon has been observed more frequently after the US approved the trading of spot exchange-traded funds (ETFs), which currently seems to have amplified the significance of CPI as a leading indicator. When Coinbase Premium Index is below SMA14, selling pressure increases “Examining the data for 2024, we clearly see that Bitcoin price corrections have occurred when the CPI (Coinbase Premium Index) fell below its’ SMA14.” – By @burak_kesmeci Link

Jul 31, 2024 - 08:00

An analyst from the CryptoQuant QuickTake platform has now drawn attention to a particular trend tied to the Coinbase Premium Index (CPI) which currently suggests a grim move brewing for Bitcoin.

This indicator, when placed with its Simple Moving Average over 14 days (SMA14), has often shown a significant correlation with Bitcoin’s selling pressure, shedding light on how crucial its impact is on the market.

Bull or Bear: What the Coinbase Index Tells Us

Before diving into what the Coinbase Premium Index is currently signalling for Bitcoin, it is worth explaining further the essence of this indicator to grasp the credibility of it. Notably, the Coinbase Premium Index (CPI) is an analytical tool that measures the variance between Bitcoin’s price on Coinbase Pro and its price on other major exchanges.

A negative CPI value suggests that Bitcoin is trading at a lower price on Coinbase Pro compared to other platforms, which typically indicates a selling pressure in the US market.

According to the CryptoQuant analyst with the name ‘burakkesmeci,’ this phenomenon has been observed more frequently after the US approved the trading of spot exchange-traded funds (ETFs), which currently seems to have amplified the significance of CPI as a leading indicator.

When Coinbase Premium Index is below SMA14, selling pressure increases
“Examining the data for 2024, we clearly see that Bitcoin price corrections have occurred when the CPI (Coinbase Premium Index) fell below its’ SMA14.” – By @burak_kesmeci
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