Bitcoin Closes In On $66,000: Here’s What’s Behind The Surge

Data shows the Bitcoin Coinbase Premium Index has surged recently, suggesting it could at least partially be behind the latest price surge.

As pointed out by CryptoQuant Head of Research Julio Moreno in a new post on X, the BTC Coinbase Premium Index has shot up into the positive territory recently. The “Coinbase Premium Index” here refers to an indicator that keeps track of the percentage difference between the Bitcoin prices listed on Coinbase (USD pair) and Binance (USDT pair).

Related Reading: US Platforms Regaining Dominance In Bitcoin Holdings: Is This Bullish?

When the value of this metric is positive, it means the asset is trading at a higher rate on Coinbase than on Binance right now. Such a trend suggests the former is observing a higher buying pressure or a lower selling pressure than the latter. On the other hand, the indicator being below zero implies the Coinbase users are participating in a higher amount of selling as compared to the Binance ones at the moment.

Now, here is the chart shared by Moreno that shows the trend in the Bitcoin Coinbase Premium Index over the last couple of weeks:

As is visible in the above graph, the Bitcoin Coinbase Premium Index had dipped into the negative territory earlier, but with the latest rally in the asset’s price, it has seen a sharp increase back into the positive region. This would indicate that the Coinbase investors have been participating in accumulation and it may be this buying that’s at least partially responsible for the coin’s surge.

Coinbase is the main platform of the US-based investors, especially the large institutional entities, while Binance serves a global traffic. As such, the Coinbase Premium Index essentially reflects the difference in behavior between the American investors and the rest of the world.

In 2024 so far, the cryptocurrency has been closely following this indicator, implying that the US-based whales have been driving the price action. Thus, it’s not unexpected to see the same trend continue for the new rally as well.

The Coinbase Premium Index is on the up right now, but it may be to keep on an eye on in the near future, as its value can quickly flip. And if it does, BTC might also see bearish winds, as it has done many times in the year already.

In some other news, Bitcoin is now approaching the cost basis of the final short-term holder cohort, as CryptoQuant author Axel Adler Jr has discussed in an X post.

This segment of the short-term holders, who bought their coins between three to six months ago, have their average cost basis at $66,300 right now. If Bitcoin can surpass this level, all of the short-term holders (that is, those who purchased within the last six months) would be back in the green.

At the time of writing, Bitcoin is trading around $65,700, up more than 3% over the past week.