Coinbase Premium Negative Again: What Does This Mean?

The Coinbase Premium ratio is in the red zone, while the BTC price is surging again. This rare pattern can only indicate powerful buying pressure on Binance (BNB), the world’s largest cryptocurrency exchange by trading volume, an analyst says.

Bitcoin (BTC) buying pressure on Binance (BNB) confirmed as Coinbase Premium in red zone

Today, Sept. 20, 2024, Coinbase Premium metrics dropped to multi-week lows. Combined with a mini-rally of the Bitcoin (BTC) price, this signals investor optimism on Binance (BNB), a pseudonymous crypto analyst who goes by Avocado Onchain says.

Negative Coinbase Premium Signals Strong Buying Pressure on Binance

“During the current upward trend, the fact that the Coinbase Premium is negative while #Bitcoin’s price isn’t falling suggests that there is strong buying pressure occurring on Binance.” – By @avocado_onchain… pic.twitter.com/ipZ09cA1JK

— CryptoQuant.com (@cryptoquant_com) September 20, 2024

The Coinbase Bitcoin Premium Index, i.e., the percent difference between the Coinbase Pro price (BTC/USD pair) and the Binance price (BTC/USDT pair), is tracked by researchers as an indicator of investors’ short-term sentiment.

When it is negative, Coinbase Pro investors are purchasing Bitcoin (BTC) cheaper than their overseas colleagues. Typically, that occurs when the BTC price is falling, but today’s situation looks to be the opposite.

The analyst highlights that the Bitcoin (BTC) price might be due to a notable rally once the FOMO expands to various regions of the globe:

In other words, during the current upward trend, the fact that the Coinbase Premium is negative while Bitcoin’s price isn’t falling suggests that there is strong buying pressure occurring on Binance.

As covered by U.Today previously, this analyst spotted a very rare “triangular convergence” bullish formation on the Coinbase Premium chart last week.

Bitcoin (BTC) futures: Institutions done shorting?

Overall, the situation looks “quite positive” for the researcher as Bitcoin (BTC) is trying to protect the $63,500 level on major spot exchanges.

Another positive indicator was registered by CryptoQuant CEO Ki Young Ju on CME futures open interest statistics.

Institutions are no longer aggressively shorting #Bitcoin. CME futures net positions have declined by 75% over the past 5 months. pic.twitter.com/Vr6Yx5TcYi

— Ki Young Ju (@ki_young_ju) September 19, 2024

According to him, large institutional players might not be shorting BTC futures aggressively any longer.

The Bitcoin Fear and Greed index jumped to the neutral zone and hit 54/100 for the first time in more than three weeks, data says.

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