According to the on-chain data and analytics provider, CryptoQuant, the Coinbase Premium Index has turned green for the first time since the fallout of the FTX collapse.
As an indicator that shows a sign of “whale accumulation,” Coinbase Premium is the price difference between Coinbase’s BTC/USD pair and Binance’s BTC/USDT pair.
“For example. when the Bitcoin price continuously broke 20k, 30k, and 40k while the Coinbase premium was maintaining more than $50 premium. It indicates that during these dips, institutions or other whales were accumulating.”
Coinbase Pro is considered “the gateway” for institutional investor purchases of cryptocurrencies, and as such, Coinbase Premium is used to track institutional whale’s movement.
CryptoQuant states that the “2020 bull run was driven by institutional investors and high net-worth individuals in the U.S., which makes investors check Coinbase Premium more than ever.”
Historically, the highs and lows of the Coinbase Premium Index have signaled possible strong buys and strong sells from Coinbase.
For example, when the Coinbase Premium reaches high values, it signals Coinbase whales may be accumulating Bitcoin regardless of the high price. However, the reverse also applies when the Index falls to low values, indicating Coinbase whales are either not buying as regularly or possibly selling their coins.
Reviewing the year so far, the Coinbase Premium Index has flipped between red and green marginally – only straying from this pattern during the two major capitulation events witnessed this year (Luna and FTX). This shows a level of uncertainty and a lack of conviction from institutions this year compared to previous years.
Journalist at CryptoSlate
Josh has been writing for a decade and is passionate about mainstream crypto adoption, bringing positive financial change to the masses through crypto and decentralized finance as a whole.
Read Our Latest Market Report
Connect your wallet, trade with Orion Swap Widget.
Directly from this Widget: the top CEXs + DEXs aggregated through Orion. No account, global access.
Get an Edge on the Crypto Market 👇
Become a member of CryptoSlate Edge and access our exclusive Discord community, more exclusive content and analysis.
On-chain analysis
Price snapshots
More context
Join now for $19/month Explore all benefits
Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.
