The Bitcoin price has been dropping, and a key indicator suggests why.
Coinbase Premium Index Takes a Dive
A metric called the “Coinbase Premium Index” tracks the price difference between Bitcoin on Coinbase (mostly US investors, especially big institutions) and Binance (global users). This helps us see if US investors are buying or selling more than the rest of the world.
Recently, this index plunged into negative territory. This means more selling is happening on Coinbase than on Binance. The chart below shows the sharp drop:
[Insert chart here – a simple description of the chart’s downward trend would suffice in markdown if a chart can’t be included]
This negative trend strongly suggests that selling pressure from US institutional investors is a major factor in the recent Bitcoin price drop. This pattern has been seen throughout 2024, indicating these investors have significant influence on the price. If this selling continues, Bitcoin’s decline could worsen.
Long-Term Holders Are Also Selling
It’s not just big US investors selling. Another indicator, the Bitcoin Binary Coin Days Destroyed (CDD), shows that long-term holders (“HODLers”) are also moving their Bitcoin. A spike in this metric means these usually patient investors are selling, adding to the downward pressure.
[Insert chart here – again, a simple description would suffice]
Current Bitcoin Price
At the time of writing, Bitcoin is around $100,400, down over 3% in the last 24 hours. The combination of selling pressure from both institutional investors and long-term holders paints a concerning picture for the short-term future of Bitcoin’s price.
