U.Today – The price differential between Coinbase (NASDAQ:) and other exchanges is measured by the Coinbase Premium Index, which recently dropped to -0.2%, its lowest level in two years. The institutional interest flowing through Coinbase is measured by the premium rate. For now, the value of the indicator suggests that US-based trading platforms such as Coinbase may show a decline.
It is generally accepted that US buyers, compared to buyers from other areas, sell more frequently, which may indicate lower institutional demand in the United States. In the past, a positive Coinbase premium has indicated significant institutional purchasing power, which typically drives up the price of Bitcoin. On the other hand, if the trend continues, a negative premium could indicate impending price volatility or even a downturn.
This low premium may indicate a halt in Bitcoin’s growth momentum, which has experienced a resurgence in recent months, especially if significant institutional interest in this asset does not reappear. After breaking out of the previous downtrend channel, $65,500 is a key support level for Bitcoin, which is currently trading near critical levels.
If selling pressure continues to enhance, a drop below this level could push Bitcoin lower to test the $63,000 range, which is the next major support level from recent trading activity. On the other hand, Bitcoin could target a price of $72,000, which many analysts see as the next significant resistance level if buyers regain control and Coinbase Premium turns positive.
A reversal in the premium index would indicate a resurgence in institutional confidence, even though Bitcoin has shown resilience at current price levels. For now, investors should monitor the support levels at $65,500 and $63,000, as a breakdown there could herald more significant corrections.
