According to a network analyst, Bitcoin has witnessed a change in investor behavior in one of its major markets, the United States. According to a market expert, this change in market dynamics could be the key to maintaining the ongoing growth of the flagship cryptocurrency.

Coinbase Premium turns positive after long-term weakness

In a post from April 25 on X, Darkfost highlighted that US institutional and professional investors have returned to the Bitcoin market and the price appears poised to continue to rise. The appropriate indicator here is the Hourly Coinbase Premium metric.

For context, this indicator tracks the hourly price difference between Bitcoin on Coinbase and Binance to indicate whether institutionally driven demand is driving prices higher, as opposed to retail driven markets. Importantly, the analyzed version of the Coinbase Premium Index is volume-weighted.

This means that larger trades have a greater impact on the calculations, helping to filter out “market noise”.

Darkfost noted that the Coinbase Premium Index is moderately positive. However, what is notable about this change is that the trend towards positives has continued since the beginning of April and, interestingly, it started after an extended period of being in negative areas.

In fact, this change suggests that Bitcoin is trading at a higher price on Coinbase than on Binance. Consequently, this trend often signals greater institutional involvement, as Coinbase is typically favored by US-based institutions and professional investors.

This is because while Binance remains one of the largest cryptocurrency exchanges in the world, it is generally perceived as more accessible to retail traders. Coinbase, on the other hand, has a reputation for serving institutional clients and offering regulatory clarity and infrastructure to large-scale investors. As such, Coinbase price increases are often viewed as a way to gauge institutional sentiment.

Coinbase Premium Could Maintain BTC’s Bullish Momentum

Darkfost further explained that the renewed buying pressure from US investors comes at a critical time for the market. Historical data confirms this: rallies driven by institutional demand are usually more stable than those driven mainly by retail speculation.

However, since the Coinbase Premium Index has not yet fully transitioned into an uptrend, it is advisable to keep an eye out for clear signals rather than accidentally getting caught up in the fray. In this regard, Darkfost mentioned that instead of just the Bitcoin price, it will also watch the index continue to rise.

At the time of writing, the price of Bitcoin is $77,525, and CoinGecko data shows that the price of this most vital cryptocurrency hardly changes from day to day.

Featured image from iStock, chart from TradingView