Bitcoin’s Coinbase premium turned negative. Here’s what it means for the BTC price

Bitcoins (BTC) final breakout over $ 50,000 may have to wait longer to materialize, as spot buy pressure on Coinbase Pro shows signs of weakening – at least in the short term.

The Coinbase Premium Index, which measures the distance between the BTC price of Coinbase Pro and Binance, has turned negative, according to to CryptoQuant. In other words, it seems that sales pressure on Coinbase is strengthening compared to other exchanges like Binance.

A negative reading on Coinbase Premium Index could be a precursor to short-term resistance. On the other hand, when the premium is high, it indicates a strong spot buying pressure on Coinbase.

Based on the index, CryptoQuant CEO Ki Young Ju mean topping $ 50,000 “looks pretty tough” in the short term.

“The current purchasing power does not come from Coinbase,” he said added. No more Coinbase premium compared to Binance / Huobi / OKEx. Be careful.”

Coinbase has become a major bellows for Bitcoin demand due to its popularity among major institutional buyers. These market participants acquire their BTC through over-the-counter markets on Coinbase Pro. Although these large purchases do not immediately affect the BTC price, they mean an increasing demand for the digital asset and in turn a decrease in the supply. The Coinbase Premium Index is therefore a way to measure institutional demand for BTC in the short term.

A short-term fluctuation in the Coinbase premium does not appear to have any impact on Bitcoin’s long-term trajectory. That the digital asset remains in a strong upward trend, which peaked well north of $ 49,700 on Sunday, according to to TradingView data.

The Bitcoin price has gained as much as 28% over the last week thanks to Tesla’s planned acquisition of the asset. Based on the electric car manufacturer’s latest 10K filing with the United States Securities and Exchange Commission, it is plans to allocate approximately 7.7% of its gross money position to Bitcoin.

Listed companies and fund managers hold ca. 6% of Bitcoin’s circulation supply – a figure that does not include Tesla’s position of 1.5 billion. $.