US Investors Lose Interest in Bitcoin, Coinbase Premium Gap Turns Negative
Bitcoin has been experiencing a downward trend in its price since the beginning of 2024. One of the possible reasons for this decline is the lack of buying pressure from US investors, as indicated by the Bitcoin Coinbase Premium Gap.
The Bitcoin Coinbase Premium Gap is an indicator that shows how much higher the Bitcoin price on Coinbase Pro, a US-based cryptocurrency exchange, is compared to the Bitcoin price on Binance, a global cryptocurrency exchange. Positive values of the gap indicate strong demand and buying pressure from US investors on Coinbase, while negative values indicate weak demand and selling pressure.
According to CryptoQuant, a platform that provides on-chain data and analysis for cryptocurrencies, the Bitcoin Coinbase Premium Gap has been negative for most of 2024, reaching as low as -51 points on February 6. This suggests that US investors are losing interest in Bitcoin and are selling their holdings, putting downward pressure on the Bitcoin price.
This is in contrast to the situation in 2021, when the Bitcoin Coinbase Premium Gap was mostly positive, indicating high interest and buying pressure from US investors. During that period, Bitcoin reached its all-time high of over $69,000 in November 2021, driven by institutional adoption, regulatory clarity, and innovation in the crypto space.
However, in 2022, the Bitcoin Coinbase Premium Gap turned negative, as US investors faced several challenges and uncertainties in the crypto market. These included increased regulatory scrutiny, tax enforcement, environmental concerns, cyberattacks, and competition from other cryptocurrencies. As a result, Bitcoin entered a bear market, dropping below $20,000 in December 2022.
As of February 7, 2024, the Bitcoin price is hovering around $43,000, down more than 38% from its peak in November 2021. The Bitcoin Coinbase Premium Gap remains negative, indicating that US investors are not showing much enthusiasm for the cryptocurrency.
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