Bitcoin: US Buying Interest Cools...Correction Warning as Coinbase Premium Plummets

▲ Dollar (USD), Bitcoin (BTC)

Bitcoin (BTC)'s Coinbase premium has plummeted, leading to warnings of slowing US investor demand and a potential price correction.

Bitcoinist reported that on an unspecified date in May (local time), the Coinbase premium turned negative for the first time since April. The Coinbase premium is an indicator that gauges US investor demand by comparing Bitcoin's price on Coinbase with prices on other major global exchanges. While a positive reading is interpreted as strong US buying pressure, a negative turn is seen as a sign of increased selling pressure, as prices on Coinbase become relatively lower.

Bitcoinist noted that during Bitcoin's rebound in April, the rise in Coinbase premium coincided with price recovery. From April 8th to 22nd, while the indicator consistently remained positive, Bitcoin rose from around $66,000 to over $79,000. This trend was interpreted as demand from US-based investors and the ETF market supporting the price increase.

However, with the recent sharp drop in Coinbase premium, the market sentiment has shifted. The weakening of the indicator also accompanied price declines in late April and early May, and even after prices recovered some losses, concerns are growing that US spot demand is not as strong as before. Analysts view a trend where the Coinbase premium does not support the price increase as a red flag.

Market analyst Crypto Tice assessed the negative turn of the Coinbase premium as a dangerous divergence in the current market. He pointed out that a structure where Bitcoin prices rise while US demand decreases is a pattern that has been repeated in this cycle before major reversals occurred. He explained that a rally not supported by the Coinbase premium is unlikely to last long.

This change in the indicator raises questions about the quality of Bitcoin's rebound. While the price itself shows a short-term recovery trend, the weakening premium, which reflects US-based buying pressure and institutional demand, puts significant pressure on the sustainability of further gains. The market is closely watching whether the Coinbase premium recovers as a key variable for Bitcoin's short-term direction.

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