Bitcoin, US Buying Interest Cools...Coinbase Premium Plunge Triggers Correction Warning

▲ USD, Bitcoin (BTC)

Bitcoin (BTC)'s Coinbase premium has plummeted, triggering warnings about slowing US investor demand and the possibility of a price correction.

Bitcoinist reported that the Coinbase premium turned negative for the first time since April on [date] in May (local time). 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. If this figure remains positive, it is interpreted as strong US buying pressure, but if it turns negative, it is seen as a sign of increased selling pressure due to relatively lower prices on Coinbase.

Bitcoinist noted that the rise in Coinbase premium coincided with Bitcoin's rebound in April. 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 changed. Weakening of the indicator also accompanied price declines in late April and early May, and even though prices have recovered some losses since then, concerns are growing that US spot demand is not as strong as before. Analysts view a trend where the Coinbase premium does not support rising prices as a red flag.

Market analyst Crypto Tice described the negative turn of the Coinbase premium as a dangerous divergence in the current market. He pointed out that the structure of Bitcoin prices rising 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, has put a greater burden on the sustainability of further increases. The market is closely watching the recovery of the Coinbase premium as a key variable for Bitcoin's short-term direction.

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